What is a justified investment?
The term "authorized investment" has different meanings in different parts of the world, and it can also mean different things depending on the context in which it is used. In many countries, there are laws that only allow banks and other financial companies to invest client funds in certain types of authorized investment vehicles. In other cases, the investment is allowed if the fund owner truly sanctions investment. Banks
generate income by investing deposit accounts in different types of securities. Some securities, such as stocks, expose investors of a higher level of main risk than other types of securities such as government bonds. Theoretically, banks' customers could lose all their money if banking institutions invest client funds in speculative high -risk securities. As a result, there are laws in many countries that require banks to invest deposited resources in certain types of low -ground securities.In these cases, the banking regulator must ensure that banks use only saved funds to purchase securities that appear on the list of authorized investment list of the national or regional government.
In addition to banks, some other entities, such as trust funds, are provided by trust powers to legally manage the amounts of money that they eventually pass on to other individuals or entities. In order to avoid confidence managers at unnecessary risk with the client's funds, trust agreements often include an authorized investment option. Recipients of trust may be able to initiate civil or even criminal proceedings against a trust manager who invests trust funds in unauthorized investment investments.
Investment brokers are licensed securities traders who buy and sell shares, bonds and other securitiesy on behalf of clients. In general, traders can only buy and sell securities to do so. However, in the OME Earth's harvest, they can assign trusting responsibilities to brokers, in which case brokers can trade without the client's consent. If such enthusiasts are to be used, brokers usually have to obtain a written statement from a client that determine the types of securities that the broker can buy on behalf of the client. Unauthorized investments are trades involving the acquisition of any securities that are not on the client list.
Employees of enterprises and government organizations are often allowed to take budget decisions and spend funds on behalf of their employer. However, most employers impose general instructions that limit the way employees can invest funds. A transport company manager may have the power to buy a truck on behalf of the company because the truck is considered a justified investment that a devicethat generate income. On the contrary, the transport company manager does not have to be authorized to invest the COFONDY MPANY in securities or other types of investment. Authorized investments therefore include someone who makes investment decisions that do not violate local laws or policies of the company.