Limited Power of Attorney/ Limited Trading Authorization

Definition - What does Limited Power of Attorney/ Limited Trading Authorization mean?

Limited Power of Attorney/ Limited Trading Authorization is the legal authorization for a representative or a firm to effect purchases and sales for a customer’s account without their prior knowledge. The authorization is limited to buying and selling securities and may not be given to another party.

Testopedia explains Limited Power of Attorney/ Limited Trading Authorization

If a customer wants to allow a firm or representative to make investments on their behalf without requiring their prior consent, the customer will have to sign a Limited Power of Attorney/ Limited Trading Authorization to document the authority. The customer is bound by the purchases and sales made on their behalf. A discretionary account must be reviewed more frequently to safeguard against abuse and all transactions must be suitable for the customer based on the customer's investment objectives.

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