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I am planning to trade stocks in the stock market but I can't open an account in a broker because I don't have a passport or driver's license. So I plan on letting my older brother make an account on a broker where in I will deposit my own funds and then trade in the stock market. May I know if this is illegal?

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    This is a question about law, and not personal finance. – Dilip Sarwate Jul 10 at 12:35
  • Why not just get a passport? – Chris W. Rea Jul 10 at 22:12
  • Due to the current covid crisis, I am still 19 which means Im not allowed to go outside – Cloyd Abad Jul 12 at 1:47
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You absolutely cannot do this.

  1. In almost all jurisdictions, you will bring severe money laundering problems.

  2. Note that your brother would have to pay all tax.

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The rules that govern this are called Know Your Customers rules:

https://en.wikipedia.org/wiki/Know_your_customer

Depending on your location it might not be strictly illegal for you to do it, but be certain that your (well, your brother's) financial institution will have problems with it.

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Most brokerages have a process to enact a "power of attorney" (POA) relationship, to allow a family member (siblings are specifically identified at this US FINRA page as a typical case) to make trades on behalf of the account owner.

So to the isolated title question: yes, it is legal and possible for a sibling to have a power of attorney granted by the brother to trade in the brother's owned brokerage account.

That said, I can't tell if the brokerage would need the identification you don't have to enable this; and further, in the details of the question, the intended ownership of the account becomes cloudy, and I am not sure if a POA would insulate the sequence where you gift your brother money, invest the money, and take the money later on. Also there is the risk to you that at any point, the brother retracts the POA, and remains the owner of the funds in the account.

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  • You can't "take the money later on". The money is not yours. You have to ask for a gift – xyious Jul 16 at 16:13
  • @xyious There are concerns of course with self dealing and fiduciary responsibility, but power of attorney gives control of the funds, which includes the power of granting gifts. – user662852 Jul 16 at 19:09

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