It is said that the forex market is highly risky. This market is not transparent enough and the top best forex brokers in India is still in dispute. When intending to become a forex trader in India, you must obtain knowledge on its general terms and conditions.
Forex traders in India may encounter confusions due to unclear policies and regulations of RBI (Reserve Bank of India), which is the national bank in India. The trading transactions between Rupee and other currencies and speculative investments may be limited and restricted.
Differences between forex laws and regulations in India
Because it is not clear that forex trading is legal or not, traders of forex market are discouraged to invest by the Reserve Bank of India (RBI). However, there are many forex brokers who assist traders making forex transactions in India.
RBI Regulated Forex Brokers
Forex practices are controlled and managed by official laws and policies promulgated by the RBI. For instance, only a maximum of $200,000 per person for forex transactions and exchanges is legitimated in accordance with RBI policies. Speculative practices are not encouraged to be incurred in any currency trading. In brief, traders in Indian may access to financial market. Moreover, as for currencies trading in future, it must be complied with the government’s restrictions and law.
SEBI Regulated Forex Brokers
In 1995, India government officially assigned the Securities and Exchange Board of India (SEBI) to regulated the actions of forex brokers as well as monitor and adjust all financial organizations practising in securities market. SEBI is recognized as a global organization putting the most impact on securities market as well as take it much more seriously in market affairs.
Traders in Indian forex market can not benefit from currencies pairs without referring to INR as a base or quoted currency. It is illegal when making transactions between INR and USD or other currencies with traders from other countries. Therefore, traders are required to pay penalties or imprisoned. Thus, brokers assigned by SEBI are only able to provide transactions of converting INR to USD, EUR, GBP, and JPY.
Primary instructions for India traders
- Firstly, RBI and SEBI have allowed trading of derivative currencies instruments on official exchanges since 2008
- Traders are able to make transactions on the three exchanges such as National Stock Exchange (NSE), United Stock Exchange (USE) and MCX-SX
- Traders can currently trade on derivatives of USD, GBP, EURo and JPY. At the beginning, only future options for INR/USD are permitted.
- Options transactions of currencies are legalize with basis of USD/INR spot rate
- Trading of derivatives are made on margin and require an initial deposit which is exchanged via your top best forex brokers
- Moreover, payment of contracts must be implemented in cash and INR. Payments are secured by exchanges. Contracts of futures are available within the period from 1 to 12 months and 3 months for options
- Lastly, 1000 per unit is this the maximum size for futures except for the pair of JPY/INR which is available for 100000 per unit.
In conclusion, although India is considered a developing marker, the top best forex brokers in India is still controversy. Therefore, traders must be equipped with sufficient legal knowledge to working with Indian brokers.
Synthesized by top4forexbrokers.net