SOME USEFUL FACTS ABOUT LEGAL FOREX BROKERS IN INDIA

Investors in India sometimes get confused about whether trading forex in this country is prohibited or not. Or within some restrictions and limitations, traders can trade some certain currencies. There is not a clear answer for the debate. One way is that traders should keep in their pocket set of rules and laws that Indian Government run on trading forex. The head bank is RBI (Reserve Bank of India). Of course, they have their restriction on trading forex. And what can legal forex brokers in India do to meet all the rules?

legal forex brokers in india

What to know about laws of forex trading in India

People may know that RBI can throw some rules that do not favor traders to invest too much on forex, especially, when trader exchange some certain currencies. RBI presents it as a high-risk activity. To help traders to solve this barrier, some brokers offer other ways around for them to invest in forex account India.

Forex brokers who are ruled by RBI.

RBI arranges some principles for traders in their country to follow and all legal forex brokers in India will work basing on these rules. To mention here, RBI limits the amount that traders can transact for their trading. Plus, usually, the maximum amount is $200,000 for an investor. In addition, any actions that could be exposed as a presume cannot be allowed to take part in the forex market. In the nutshell, traders and brokers can satisfy all the requirements given by Indian government.

The forex brokers who are ruled by SEBI

Indian Government gives the authority to The Securities and Exchange Board of India (SEBI) to oversee and inspect all the financial activities and their top priority is the security of the market. This organization will make a huge impact on forex market and financial affairs; therefore, the given regulations are extremely strict and secured.

Traders who work with legal forex brokers in India are considered illegal if they take any abroad exchanges INR to USD with any other foreign brokers. Also, it is the case when INR is the base or counter currency in the transactions. The punishment can be more serious if the damage is extreme that traders can be imprisoned. Finally, the safe currencies to trade are USD, EUR, GBP, and JPY only.

Some tips Indian traders should follow:

  • All the currency derivatives are allowed trading when they are accepted by RBI and SEBI.
  • There are three stock exchanges that traders should trade with. They are the National Stock Exchange (NSE), MCX-SX and the United Stock Exchange (USE)
  • Derivatives of USD, GBP, EUR, and YEN are added later on before there was just USD can be traded
  • Underlying as US Dollar /Indian Rupee (USD-INR) spot some rate is now on the trade too
  • Exchange process is run by an amount of margin which is made by a mediator 
  • The settlement of every trading is paid on cash and with the currency of Rupee, which is committee 
  • The agreement is generated with 1 to 12 months and if it is just options, the time is three months
  • The lot size of the investment is 1000 per unit for regular pairs but for  JPY/INR it is 100000 per unit.

Conclusion

Legal forex brokers in India could be regulated by RBI or SEBI and traders should have clear knowledge of how these regulations work and make profit from trading with the wise strategies. Next, learn about high leverage forex brokers.

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