Can an NRI do Intraday Trading in India
Each one of us is aware of the fact that an NRI is allowed to trade in Indian Stock Market. An NRI is allowed to invest or trade in real estate, mutual funds, equities, government securities and many other instruments.
To avail these services an NRI has to follow different procedures as they need to open the different accounts in the Indian Banks.
But as a matter of fact, one must also know that a NRI cannot do trade in the Intraday Trading in India. Although, they are allowed to trade in Futures and Options. RBI (The Reserve Bank of India) has not allowed the NRI’s to do Intraday Trading in the Indian Stock Market. They can only trade in the delivery trades.
The NRI’s also are not allowed to put the STBT, BTST Trading or the short selling in the Indian Stock Market. There are various segments in which an NRI cannot trade viz. Intraday Trading, commodities, currency derivatives.
It serves as a plus point for the NRI’s that they can trade from abroad in the Indian Stock Market. There are some brokers that allows trading in futures and options at BSE. An NRI customer is required to have the CP (Custodial Participant) code to trade in the Future and Options market. An NRI can trade in the F&O market of the exchange out of the rupee funds in India and that on a non-repatriation basis.
An NRI is still left with multiple investment options in the Indian Stock Market. The only requirement with an NRI is to get their demat account opened with the Indian Banks. They do not require to hold a trading account as this account is needed for Intraday Trading and NRI’s are not allowed to trade in Intraday.
Now, If an NRI cannot trade in Intraday then what are the other options in which they can invest their capital?
Here, are the various NRI investment options in the Indian Stock Market.
1. Fixed Deposits.
2. Equities.
3. Government Securities.
4. National Pension Schemes.
5. Initial Public Offering (IPO).
6. Mutual Funds.
7. National Pension Schemes and more.
With the various options to make NRI investment in India, he can also have several restrictions while making investments in the Indian Stock Market.
An NRI has to open a different account that they can open in any bank in India. These accounts are required so that NRI can make investments in various segments through this account. The accounts that are necessary to open are the:
1. Non-Resident Ordinary Account (NRO)
2. Non-Resident External Account (NRE)
3. Foreign Currency Non-Resident (FCNR)
The NRI customers are allowed to make investment only on the 5% of their paid-up capital on their specific company. The NRI accounts are controlled by the SEBI (Securities Exchange Board of India) and RBI (Reserve Bank of India).
Moving towards the end of this article, some key points we learned about are:
• NRI’s are not allowed to trade in India.
• Several investment options for NRI to make investments in India.
• The NRI can trade F&O at BSE with some restrictions.
• Only few brokers give the facility of trading in F&O in the Indian Stock Market to the NRIs.
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