Hi Guys,
Can anyone explain the rules and regulations for NRI for online trading in Indian equity market.
1) If NRI gets an online trading account to trade Indian stock market by simply producing his PAN number and proof of residence and other relevant documents regardless showing any identity of any proof of foreign living status?
Please explain rules and regulations in this regard.
Cheers!
Buzz
Dear BUZZ,
NRI Trading account is not available to foreign residents including Non-Resident Indians (NRIs) in United States.
NRI would not be allowed to day trade. Indian non-resident investors are not allowed to speculate on a day-to-day basis in the markets. For instance if they buy shares on Monday they would have to wait till Wednesday to sell it. However, they would be allowed to trade in the futures segment of the market.
If you want to trade with NRE account and the profit to your NRE account rather than NRO account then only you need to follow the below procedures. Else you can open a trading account like normal(PIS is needed but PAN is not needed in foreign address), no difference.
As most people and broker firms agents will say its complicated to take one and will confuse you. One of my relative have NRI Trading account and I have did everything for him. When I have contacted ICICIDirect, Sharekhan and Geojit Agents and even calls them directly they told me its a very complicated thing and forced me to take a normal trading account. Even ICICIDirect officer told me the same. But it is not that much complex in reality. I will explain the procedure below.
Donot go for ICICIDirect for trading, They are the very worst service in India. Also their brokerage is very high (If you ask them they will explain its the lowest by saying so many fake excuses, don't believe). But their ICICI Banking services are just good not best.
STEPS:
1. Take a PAN CARD(Photo and Passport copy for Foreign address proof) with your foreign address. You can apply for this in the normal form itself, put address with your overseas address and put your communication address with Indian address. If you have already taken a PAN Card with local address, then cancel the card and take a new one with foreign address.(Holding two PAN Cards are illegal.)
2. Take an NRE account with any banks like HDFC, ICICI, SBI, AXIS, etc. I recommend HDFC Bank. They provide standard quality services.
3. Take a PIS or PINS account linked to the NRE account from the same bank. You need PAN Card for this. This PINS is also known as RBI premission for NRI online trading.
3. Go to a trading firm, Sharekhan(go for Trade Tiger account not classic or fast trade), Religare, or Geojit and fill the form from there itself and submit the necessary documents.
Primary Documents Needed: Photo, Passport Copy, Local Address proof (Telephone/Bill/Ration Card/etc.), PAN CARD Copy, NRE bank statement, PIS Bank statement.
Your account will get activated in 3 or 4 days. Then you can trade with status of NRE. If I had missed anything readers please report.
Happy Trading.
Hari.
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