NSA just introduced DJIA and s&p 500 global indices

[forexworld]

Hello, recently national stock exchange has enabled trading in global indices s&p 500 and DJIA,I only trade them both and commodities!Now we all know that international currency trading is illegal in india, no resident is allowed to deposit money in overseas broker and trade in forex or remmitance in the form of margin calls or margin trading( I don't know what the heck is this?) hence we all are doing it there are loopholes! but......

now that NSA has allowed trading in global indices I was wondering that I am more comfortable in trading on the meta trader 4 platform ! If i choose the law i would have to open a demat or trading account with a bank in order to trade in these indices, hence I just cannot stand their platform there platforms are way above my head! I love mt4, there I can choose the lots ,volume use various indicators etc etc it is very easy and i love it!! even the professional traders all over the world use these mt4/mt5 and not some stupid icicdirect or axix demat account for technical analysis! you all know that! but these banks platforms are shi* according to me! Most of the brokers overseas are nowadays offering multi instruments! forex, indices, future, options ! Now according to the law "A resident individual may make a remittance under the Liberalized Remittance Scheme for resident individuals upto USD 200,000 for capital or current account transcation" Residents are, however, permitted to trade in currency futures and options contracts, !!

:"MY QUESTION IS"- "SUPPOSE" my family in london,UK suppose they fund my account with a very good capital, they do it from london with their pound money they fund my fxcm account ! or leave family suppose I won a demo contest and got some money to start trading from the broker itself !!Now if i trade these 2 indices on multiple instruments based brokers like fxcm and withdraw to my indian bank account and telling the bank that return from trading in s&p 500 and dow jones ,Gold, Silver !! as trading in commodity and these 2 indices are legal will "THE LAW APPLY ON ME", ? the only problem is that i am trading on an overseas broker that allows trading in many instruments! Am I breaking the law? I am trading indices and commodity on a forex broker in other words but i did not remit any money from india! can i directly tell the bank these? and what is your opinion?

 

[forexworld]

no one at all ??

 

[manfor]

Dear Forexworld, I have the same problem as you do and am searching the forum for exactly this issue but could't find any. I am sure there are a lot of traders in this forum trading forex and cfds in UK or another and having the same problem.

I hope someone with proper knowledge would come up and answer your question. I hope the moderator takes some interest on this.

As this will help 100s of traders

 

[forexworld]

yes i think people should post their view about this because Idon't see any kind of breaking of law in this!

 

[sayantan2u9]

many people trade in forex from india.
its a fact
there are some loopholes in the law

i spoke with one broker who said the government cant know whether you trade in currency futures or s&p500 djia
so they cant do anything

other ppl also share ur knowledge

 

[sanjosedesi]

I think your 1st post in this thread is very confusing. You are mixing up 2 issues
- What can be traded in India, and
- What can be traded by Indians globally under the liberalized scheme

Also, it is NSE, not NSA. NSA will anyway know of your trades ... it is their job to find out ;-)

What can be traded in India?
- You can definitely trade currencies. You can not do CFDs or all currencies, but the indian government allows you to trade 4 currency pairs - USD, GBP, Yen and Euro against Rupee.
- The DJIA futures you are allowed to trade in India ... these are also traded at your normal stock exchange (NSE). You do not have to send money to US to make this happen. You can talk to any broker (kotak, icici, zerodha) .. they will all support it.

You can do this because you are explicitly allowed this by either RBI or the exchanges.

What you are saying is that because RBI allows these in India, you can take money under the liberalized scheme and do these there ?? I am not sure of the details, but I will go by what I read here. You can trade scrips, but not currencies. So by law you are not allowed to trade even USD-INR when you open an account outside India.

Of course that does not stop you from doing what you want to do ... because who will know !! Right, when the government potentially has access to all your emails and SMS ... they may not care most of the time, but watch out if you get caught. Read up on FEMA and income tax audits.

 

[fxgood]

As long as you don't remit funds outside it even won't comes under RBI norms, so when you didn't remitted funds their is no restrictions as per se.

 

[forexworld]

I think your 1st post in this thread is very confusing. You are mixing up 2 issues
- What can be traded in India, and
- What can be traded by Indians globally under the liberalized scheme

Also, it is NSE, not NSA. NSA will anyway know of your trades ... it is their job to find out ;-)

What can be traded in India?
- You can definitely trade currencies. You can not do CFDs or all currencies, but the indian government allows you to trade 4 currency pairs - USD, GBP, Yen and Euro against Rupee.
- The DJIA futures you are allowed to trade in India ... these are also traded at your normal stock exchange (NSE). You do not have to send money to US to make this happen. You can talk to any broker (kotak, icici, zerodha) .. they will all support it.

You can do this because you are explicitly allowed this by either RBI or the exchanges.

What you are saying is that because RBI allows these in India, you can take money under the liberalized scheme and do these there ?? I am not sure of the details, but I will go by what I read here. You can trade scrips, but not currencies. So by law you are not allowed to trade even USD-INR when you open an account outside India.

Of course that does not stop you from doing what you want to do ... because who will know !! Right, when the government potentially has access to all your emails and SMS ... they may not care most of the time, but watch out if you get caught. Read up on FEMA and income tax audits.

The facts are that RBI doesn't want the Rupee to lose out to the US Dollar or any other foreign currency. It's main role is to protect our national asset. Hence it has clearly outlawed forex trading for Individuals, however its still legal for companies that have forex reserves. These companies cannot clearly use the Rupee to purchase USD for trading.


What I was asking is that recently NSE has launched trading in DJIA and S & p 500 but I don't understand the platforms for demat account of icici, kotak etc etc ! I am more comfortable with mt4 for trading these 2 index !we all know that sending money outside India to forex broker for the purpose of trading in forex is not permitted but how about the money is not sent from india . suppose I won a demo contest and got some money to start trading from the broker itself , I remmited no money oustide india but the broker itself fxcm gave me money to start trading, so I am not trading with the INR converted into USD and funding it outside india but I am trading with the broker money itself ! then? And I don't want to trade currency for indians pairs but like eur/usd etc etc The law doesn not pervent from opening an account abroad but funding it from india ( INR converted into USD) is forbidden!


penalty for breaking the FEMA law -
If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues.!

for sending money outside india -
. What are the prohibited items under the Scheme?

Ans. The remittance facility under the Scheme is not available for the following:

i) Remittance for any purpose specifically prohibited under Schedule-I (like purchase of lottery tickets/sweep stakes, proscribed magazines, etc.) or any item restricted under Schedule II of Foreign Exchange Management (Current Account Transactions) Rules, 2000;

ii) Remittance from India for margins or margin calls to overseas exchanges / overseas counterparty;

iii) Remittances for purchase of FCCBs issued by Indian companies in the overseas secondary market;

iv) Remittance for trading in foreign exchange abroad;

v) Remittance by a resident individual for setting up a company abroad;

vi) Remittances directly or indirectly to Bhutan, Nepal, Mauritius and Pakistan;

vii) Remittances directly or indirectly to countries identified by the Financial Action Task Force (FATF) as “non co-operative countries and territories”, from time to time; and

viii) Remittances directly or indirectly to those individuals and entities identified as posing significant risk of committing acts of terrorism as advised separately by the Reserve Bank to the banks.






FURTHER TO THE VERY NEW NOTICE THAT RBI HAS MENTIONED ( THIS IS JUST A CLARIFICATION NOT A LAW) - The advertisements by these Internet or online portals exhort people to trade in forex by way of paying the initial investment amount in Indian rupees," the RBI said. It is clarified that any person resident in India collecting and effecting remitting such payments directly indirectly outside India would make himself/ herself liable to be proceeded against with for contravention of FEMA, 1999 besides being liable for violation of regulations relating to know your customer (KYC) norms and anti money laundering (AML) standards, it said.






IT clearly states remmitance, when there is no remmitance from india involved where does the law and penalty stands! when I never remmited any money outside India directly or indirectly( thourgh 3rd party) or converted any INR to USD for this purpose! Regarding even if they get any emails or sms! when I never remitted Indirectly or directly I am not liable to be proceeded against with for contravention of FEMA, OTT this is jst a clarification its not a law there is no law in fema, KYC or AML that states that we cannot trade in forex with the money that does not belong to India as well! it only states remmitance in indian money!

 

[forexworld]

I am looking forward for your reply sjd

 

[forexworld]

As long as you don't remit funds outside it even won't comes under RBI norms, so when you didn't remitted funds their is no restrictions as per se.

why are you copying and posting someone else post ?