Source:
http://www.alpari.co.in/en/about_alpari/index.html
Alpari Forex (India) Pvt. Ltd. was formed to promote Forex-trading capability to Indian retail and institutional customers. Individual Indian traders, fund managers and institutional customers will benefit from innovative and proprietary currency-trading technology combined with quality execution, competitive spreads, margins and expert and responsive customer support from our highly professional teams.
Alpari Forex (India) Pvt. Ltd. is a company formed under the Indian Companies Act, 1956. Alpari Forex (India) Pvt. Ltd will be conducting and offering marketing, sales, client services and compliance services in India on behalf of Alpari (UK).
All accounts are opened directly with Alpari (UK), which is authorised and regulated by the Financial Services Authority in the UK.
Alpari Forex (India) Pvt. Ltd is responsible for
new-client acquisition in India. Alpari Forex (India) Pvt. Ltd. will also be registering for membership of Indian currency exchanges including the National Stock Exchange (NSE) and the
Multi Commodity Exchange (MCX) in order to offer
Indian Forex products to its Indian clients.
They have never said that they will be offering SPOT trading if you open account with them. They will give you a UK based account and you have to do Bank Transfer. This again confuse the overall scenario
...but then I went through this document
http://www.finmin.nic.in/the_ministry/dept_eco_affairs/america_canada/fema_acts/index.htm
Look for Section 3 - Capital Account Transactions are "allowed"
6. Capital account transactions. - (1) Subject to the provisions of sub-section (2), any person may sell or draw foreign exchange to or from an authorized person for a capital account transaction.
(2) The Reserve Bank may, in consultation with the Central Government, specify-
(a) any class or classes of capital account transactions which are permissible;
(b) the limit up to which foreign exchange shall be admissible for such transactions: Provided that the Reserve Bank shall not impose any restriction on the drawal of foreign exchange for payments due on account of amortization of loans or for depreciation of direct investments in the ordinary courts of business.
(3) Without prejudice to the generality of the provisions of sub-section (2), the Reserve Bank may, by regulations, prohibit, restrict or regulate the following-
(a) transfer or issue of any foreign security by a person resident in India;
(b) transfer or issue of any security by a person resident outside India;
(c) transfer or issue of any security or foreign security by any branch, office or agency in India of a person resident outside India;
(d) any borrowing or lending in rupees in whatever form or by whatever name called;
(e) any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India;
(f) deposits between persons resident in India and persons resident outside India;
(g) export, import or holding of currency or currency notes;
(h) transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India;
(i) acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India;
(j) giving of a guarantee or surety in respect of any debt, obligation or other liability incurred-
(i) by a person resident in India and owed to a person resident outside India; or
(ii) by a person resident outside India.
Ok... that is fine.. now lets learn about
Capital Account Transactions
Source:
http://www.rbi.org.in/SCRIPTS/BS_FemaNotifications.aspx?Id=155
Look for Section 3 -
Permissible Capital Account Transactions
we are interested in only this part..
transactions, specified in Schedule I, of a person resident In India;
so lets go to schedule I
Schedule I
[See Regulation 3 (1) (A)]
Classes of capital account transactions of Persons resident in India
a) Investment by a person resident in India in foreign securities
b) Foreign currency loans raised in India and abroad by a person resident in India
c) Transfer of immovable property outside India by a person resident in India
d) Guarantees issued by a person resident in India in favour of a person resident outside India
e) Export, import and holding of currency/currency notes
f) Loans and overdrafts (borrowings) by a person resident in India from a person resident outside India
g) Maintenance of foreign currency accounts in India and outside India by a person resident in India
h) Taking out of insurance policy by a person resident in India from an insurance company outside India
i) Loans and overdrafts by a person resident in India to a person resident outside India
j) Remittance outside India of capital assets of a person resident in India
k) Sale and purchase of foreign exchange derivatives in India and abroad and commodity derivatives abroad by a person resident in India.
Ok.. fine so I can invest but what is the mode of payment
Method of payment for investment :-
The payment for investment shall be made by remittance from abroad through normal banking channels or by debit to an account of the investor maintained with an authorised person in India in accordance with the regulations made by the Reserve Bank under the Act.
that means direct debit to your account via SWIFT transfer or Wire Transfer which is regulated by RBI and big money (if coming) will be sniffed by the RBI watch dogs...
but then there was an amendment to this rule, here
http://www.rbi.org.in/SCRIPTs/BS_FemaNotifications.aspx?Id=1717
Under prohibitions, following items were added...
Prohibitions
(a) subject to the provisions of the Act or the rules or regulations or directions or orders made or issued thereunder, a resident individual may draw from an authorized person foreign exchange not exceeding USD 25000 per calendar year for a capital account transaction specified in Schedule I ;
(b) where the drawal of foreign exchange by a resident individual for any capital account transaction specified in Schedule I exceeds USD 25,000 per calendar year, the limit specified in the regulations relevant to the transaction shall apply with respect to the drawal.
Provided further that no part of the foreign exchange of USD 25,000 drawn under clause (a) of the first proviso shall be used for remittance directly or indirectly to countries notified as non-co-operative countries and territories by Financial Action Task Force (FATF) from time to time and communicated by the Reserve Bank of India to all concerned.'
So as long as you are under the limit of 25K USD per calendar year... which is over INR 12 lakhs ... you should be fine unless a RBI watchdog sniff into your account and want to investigate what is going on..
Hope that makes it clear but still I will file a request to RBI & FEMA and ask for clarifications... does this make this thread a 'sticky' ???
DISCLAIMER : Please go through all the links before making any assumptions and consult with your legal advisory and do not take me as your legal advisor
