Attention! - Forex trading is illegal in India!

[duster]

I wonder how you could not understand the difference. The Liberalised Remittance Scheme ruling clearly says that the remittance of money for margin trading is not permitted. In that process you are sending (remitting) money to overseas counterparty for margin trading.

Now if any Indian company is offering forex product within the guidelines of RBI then there is no remittance of money to outside India, it will be a simple NEFT or cheque transfer within India. They are two totally different kind of financial transactions governed by different laws.

So as Vijay confirmed from RBI itself, money remitted to overseas exchange or counterparty for margin trading is clearly not permitted under LRS by RBI. But as someone mentioned earlier there are many other ways to do it. Also I haven't heard of any forex trader harresed for illegal remittance yet.

An excerpt from the same RBI page:

==
No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme of USD 200,000 on the quality of the investment an individual can make. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments which he or she proposes to make.
==

Yes, it's mentioned that margin calls transfers cannot go under LRS, but again - many brokers open you a real account (some even have banking license) where you can make transfers, where you receive interest rate, etc. So, technically speaking, in such case you're remitting money to a foreign account (which is clearly allowed by RBI) and then, then you decide to use part of this amount for trading. This way, technically speaking - you're not breaking any laws.

Also, you can find a NRI friend who can make transfers for you. NRIs are not subject to RBI's limitations.

Also, if you have a foreign bank account - you're also exempt from the RBI limitations.

Anyway, RBI is softening the rules every year and soon the country will be open - it's just required in the modern world.

 

[AdaG]

An excerpt from the same RBI page:

==
No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme of USD 200,000 on the quality of the investment an individual can make. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments which he or she proposes to make.
==

Yes, it's mentioned that margin calls transfers cannot go under LRS, but again - many brokers open you a real account (some even have banking license) where you can make transfers, where you receive interest rate, etc. So, technically speaking, in such case you're remitting money to a foreign account (which is clearly allowed by RBI) and then, then you decide to use part of this amount for trading. This way, technically speaking - you're not breaking any laws.

Also, you can find a NRI friend who can make transfers for you. NRIs are not subject to RBI's limitations.

Also, if you have a foreign bank account - you're also exempt from the RBI limitations.

Anyway, RBI is softening the rules every year and soon the country will be open - it's just required in the modern world.

Hmm so you are talking about this section:

58. Are there any restrictions on the kind/quality of debt or equity instruments an individual can invest in?

No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme of USD 200,000 on the quality of the investment an individual can make. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments which he or she proposes to make.

My take is that you only read the answer not the question because somehow you want to imagine it to be legal whether it is or not. Here we are talking about DEBT or EQUITY instruments. Now RBI has permitted Indian brokerages to connect to NYSE and other exchanges for stock and bond trading. ICICI direct is offering services for that. But you can not trade the FnO segment and can only take delivery of shares with T+2 rolling basis (check with icicidirect for more on this).
ForEx trading is OTC derivative trading, it is a leveraged instrument and retail brokerages do not give delivery for the contract. Hence it is margin trading and it is mentioned in the same web page;

Under the Scheme, resident individuals can acquire and hold immovable property or shares or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India. However, it is clarified that remittance from India for margins or margin calls to overseas exchanges / overseas counterparty are not allowed under the Scheme.

Now if you were not aware of the fact that forex trading was(is) margin trading then do read about it first. Most of the Forex retail brokers are under Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) in US. Meaning accounts with them are considered as margin trading account and not regular saving or fixed deposits, rules of fund protection are way different. Once you are trading large volumes, you can always trade through a custodian bank, so swapping your money from trading account to savings accounts will make things much easier. But till than we need to be cautious.

Hopefully this would make things more clear.

 

[SavantGarde]

While You Were Clever To Underline Something Important In A Stand That It Is Not Allowed.

Allow Me To Show You How It Is Possible....What I Have Underlined & Changed The Colour Is The Loop Hole "Remittance FROM INDIA"

Hope I Don't Have To Elaborate Anymore

Happy & Safe Forex Trading

SavantGarde

Under the Scheme, resident individuals can acquire and hold immovable property or shares or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India. However, it is clarified that remittance from India for margins or margin calls to overseas exchanges / overseas counterparty are not allowed under the Scheme.

Now if you were not aware of the fact that forex trading was(is) margin trading then do read about it first. Most of the Forex retail brokers are under Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) in US. Meaning accounts with them are considered as margin trading account and not regular saving or fixed deposits, rules of fund protection are way different. Once you are trading large volumes, you can always trade through a custodian bank, so swapping your money from trading account to savings accounts will make things much easier. But till than we need to be cautious.

Hopefully this would make things more clear.

 

[yashdave]

hi,i had a talk with many forex companies.they said that they had many clients from india,and i had a proof of it.when i had a talk with reliance money,they sai that they will submit a form in the bank which shows that you are not crossing the liberelised remittence scheme.this cannot make you trapping under the scheme.alpari had started their operations in india.they said they will consider your money as FOREIGN CAPITAL INVESTMENT.no one will ask you where your money is going as said by them.EVEN ONE OF THE TOP RUSSIAN FOREX COMPANY MRC HAD STARTED ITS OPERATION IN INDIA AND THEY ARE GIVING 5 % INTEREST ON UNUSED MONEY.YOU CAN CHECK IT OUT www.moneyrain.org they had even started marketing through google,email marketing,etc.they will most probably tie with one of indias biggest stock brokering company.i think its enough evidence that we can trade in forex..:clap:

An excerpt from the same RBI page:

==
No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme of USD 200,000 on the quality of the investment an individual can make. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments which he or she proposes to make.
==

Yes, it's mentioned that margin calls transfers cannot go under LRS, but again - many brokers open you a real account (some even have banking license) where you can make transfers, where you receive interest rate, etc. So, technically speaking, in such case you're remitting money to a foreign account (which is clearly allowed by RBI) and then, then you decide to use part of this amount for trading. This way, technically speaking - you're not breaking any laws.

Also, you can find a NRI friend who can make transfers for you. NRIs are not subject to RBI's limitations.

Also, if you have a foreign bank account - you're also exempt from the RBI limitations.

Anyway, RBI is softening the rules every year and soon the country will be open - it's just required in the modern world.

 

[ag_fx]

hi,i had a talk with many forex companies.they said that they had many clients from india,and i had a proof of it.when i had a talk with reliance money,they sai that they will submit a form in the bank which shows that you are not crossing the liberelised remittence scheme.this cannot make you trapping under the scheme.alpari had started their operations in india.they said they will consider your money as FOREIGN CAPITAL INVESTMENT.no one will ask you where your money is going as said by them.EVEN ONE OF THE TOP RUSSIAN FOREX COMPANY MRC HAD STARTED ITS OPERATION IN INDIA AND THEY ARE GIVING 5 % INTEREST ON UNUSED MONEY.YOU CAN CHECK IT OUT www.moneyrain.org they had even started marketing through google,email marketing,etc.they will most probably tie with one of indias biggest stock brokering company.i think its enough evidence that we can trade in forex..:clap:

Reliance Money?? Seriously? Never heard of them as Forex Spot brokers!!!!

Could you post some more links and the proofs said by you?

Happy Trading

 

[duster]

hi,i had a talk with many forex companies.they said that they had many clients from india,and i had a proof of it.when i had a talk with reliance money,they sai that they will submit a form in the bank which shows that you are not crossing the liberelised remittence scheme.this cannot make you trapping under the scheme.alpari had started their operations in india.they said they will consider your money as FOREIGN CAPITAL INVESTMENT.no one will ask you where your money is going as said by them.EVEN ONE OF THE TOP RUSSIAN FOREX COMPANY MRC HAD STARTED ITS OPERATION IN INDIA AND THEY ARE GIVING 5 % INTEREST ON UNUSED MONEY.YOU CAN CHECK IT OUT www.moneyrain.org they had even started marketing through google,email marketing,etc.they will most probably tie with one of indias biggest stock brokering company.i think its enough evidence that we can trade in forex..:clap:

Hey! Where did you get information about Alpari?? Don't see anything on their website.

 

[duster]

Hmm so you are talking about this section:

58. Are there any restrictions on the kind/quality of debt or equity instruments an individual can invest in?

No ratings or guidelines have been prescribed under the Liberalised Remittance Scheme of USD 200,000 on the quality of the investment an individual can make. However, the individual investor is expected to exercise due diligence while taking a decision regarding the investments which he or she proposes to make.

My take is that you only read the answer not the question because somehow you want to imagine it to be legal whether it is or not. Here we are talking about DEBT or EQUITY instruments. Now RBI has permitted Indian brokerages to connect to NYSE and other exchanges for stock and bond trading. ICICI direct is offering services for that. But you can not trade the FnO segment and can only take delivery of shares with T+2 rolling basis (check with icicidirect for more on this).
ForEx trading is OTC derivative trading, it is a leveraged instrument and retail brokerages do not give delivery for the contract. Hence it is margin trading and it is mentioned in the same web page;

Under the Scheme, resident individuals can acquire and hold immovable property or shares or debt instruments or any other assets outside India, without prior approval of the Reserve Bank. Individuals can also open, maintain and hold foreign currency accounts with banks outside India. However, it is clarified that remittance from India for margins or margin calls to overseas exchanges / overseas counterparty are not allowed under the Scheme.

Now if you were not aware of the fact that forex trading was(is) margin trading then do read about it first. Most of the Forex retail brokers are under Commodity Futures Trading Commission (CFTC) and National Futures Association (NFA) in US. Meaning accounts with them are considered as margin trading account and not regular saving or fixed deposits, rules of fund protection are way different. Once you are trading large volumes, you can always trade through a custodian bank, so swapping your money from trading account to savings accounts will make things much easier. But till than we need to be cautious.

Hopefully this would make things more clear.

I'm going through RBI's notifications and circulars, and so far I see that:

1) Use of Debit/Credit cards (Visa/Mastercard for example) is not a part of Liberalised Scheme, and hence is not subject to this limitation. As far as I see, it's absolutely legal to use credit cards for Forex trading, even though it won't work for big amounts because of daily limits most banks set.

2) RBI mentioned that remittances for margin trading should not be allowed in a notification sent to all authorized dealers (companies that can exchange foreign currency in India). It's an instruction for banks, not for individuals. Hence, if your bank lets you make a transfer (and many banks do in India) - it's their responsibility, not yours. It's them who should check all the details!

Anyway, please correct me if I'm wrong! I'm trying to get a better picture on the issue.

 

[yashdave]

they are going to start operation in 2-3 months in india.it will be very soon flash on their websites.they already had their representatives in india and they are going to launch very soon in india.mrc had started its operation you can check on there web page.

Hey! Where did you get information about Alpari?? Don't see anything on their website.

 

[yashdave]

you could check out on there website.they are not marketing about forexbut if you will contact them they will provide you all the details for opening forex account with them.they are ib broker of cmc markets (uk).dude you could chek out other brokers also which had started their operations in india.they are providing outstanding facalities.i am trading with them ,you can also check it out.one of them are money rain,alpari etc.i think money rain is far better then alpari....gud luck..:thumb:

Reliance Money?? Seriously? Never heard of them as Forex Spot brokers!!!!

Could you post some more links and the proofs said by you?

Happy Trading

 

[duster]

you could check out on there website.they are not marketing about forexbut if you will contact them they will provide you all the details for opening forex account with them.they are ib broker of cmc markets (uk).dude you could chek out other brokers also which had started their operations in india.they are providing outstanding facalities.i am trading with them ,you can also check it out.one of them are money rain,alpari etc.i think money rain is far better then alpari....gud luck..:thumb:

I'm going through website of MoneyRain and cannot find any single address of any single office in _any_ country!

I personally would never trust my funds to a company that doesn't even publish their addresses, looks like scam!

Clients must always get: 1) legal name of the company 2) registered address. So in case of problems, they at least know whom to sue )

Alpari is definetely a much more serious company, but I hardly imagine how are they going to operate in India. We all know that there is no free market in the country and everything is already occupied by a little number of rich families (Ambani, Tata, etc). They will not let foreign companies come and work, I'm quite sure.