SEBI stands for Securities and Exchange Board for India (SEBI) which regulates companies and the shares owned by them. Issuance of licenses to forex brokers is also the responsibility of SEBI. Forex trading on Indian exchanges is becoming quite popular in India, as it creates opportunities to make money fast. Furthermore, the top 10 forex brokers in India which are regulated by SEBI have been trusted by many to trade in the currency futures market.
Is Forex Trading Legal in India?
While choosing the best Indian forex broker, many people are confused about whether forex transactions are legal in India or not. Let us clear this confusion for you. Trading strategies through forex remain legal until the time when the currency pairs traded include the Indian National Rupee (INR).
Legal international forex trading broker to trade currencies in India. But Indian nationals are prohibited from using online platforms to trade and have to settle for SEBI regulated forex brokers in India. This was done to prevent the Reserve Bank of India from running out of dollars and avoid further devaluation of the Indian currency.
How Do SEBI Regulated Forex Brokers Work?
Apart from SEBI, other organizations are also involved in drafting the rules and regulations of derivatives trading in India. This includes the Royal Bank of India. All relevant trading guidelines have been established under the Foreign Exchange Management Act.
While looking for the top forex brokers, you should keep in mind that you can trade through three stock exchanges. Trading for such currency derivatives is carried out on margin. This means that with the help of a SEBI regulated forex broker in India, you will have to deposit a certain amount of initial margin to the stock exchange of your choice. The contract will then be settled in INR.
When it comes to the future cycle period, it can be anywhere from 1-12 months. The lot size for all currency pairs is 1000 units except for the Japanese yen/Indian rupee pair.
One of the SEBI Regulated Forex Brokers
Your search for the best broker for forex trading will probably end here. Traders union has a list of trading platforms forex for beginners that follow guidelines by government authorities for legal forex trading in India.
FXTM
FXTM, one of the best Indian forex brokers, makes trading easier for beginners with lots of video tutorials, seminars, and more. It also ensures that you get maximum profit by keeping spreads to a minimum.
In addition, with a faster trade execution process, FXTM allows you to make informed trading decisions.
Features of FXTM Signal Trader Forex Broker
• With the help of crypto currency financial instruments and stocks FXTM provides good access to global markets.
• It offers several types of trading accounts such as standard, cent, and stock.
• FXTM leverages modern trading technologies such as MetaTrader 4 and MetaTrader 5. FXTM also has dedicated mobile and tablet applications.
• Using FXTM’s investment features, beginners can copy the investment practices of experienced traders.
FBS
The SEBI regulated forex broker, FBS, can also be used to deal with CFDs, metals, and stocks. Beginners can open an FBS cent account which involves much lower risk.
In addition, this forex trading application is compatible with various payment methods accepted worldwide.
FBS Best Forex Broker Features
• The FBS forex trading platform maintains low spreads to cover your losses and maximize your profits. You can start with -1 pip.
• Commissions for traders or managers are provided by FBS itself.
• You can get guaranteed support around the clock if you have a complaint.
• Under the Forex News section, you can get information about the latest events shaping the market
• FBS has a dedicated mobile app for Apple iOS and Android devices.
Frequently Asked Questions (FAQ)
What Restrictions Are Imposed on SEBI Registered Forex Brokers in India?
Forex trading brokers work according to the following restrictions in India-
• Forex traders cannot take part in trading any currency pairs that do not include INR as the base currency.
• Any Indian citizen is legally prohibited from sending INR overseas for investment or conversion purposes.
• All SEBI regulated forex brokers in India must be registered and have a valid license.
How to Stay Safe from Indian Forex Broker Scams?
Indian forex broker scams are more common than you might think. If you are also thinking about dealing in foreign currencies, these are a few points you need to keep in mind.
• Only hire SEBI-regulated forex brokers in India. You can ask to see the broker’s license or check the same on the site.
• Keep checking the official SEBI website to find out which new forex brokers have been approved or rejected.
• If the broker offers to trade a different currency pair, stop the transaction immediately. Indian law prohibits pairing with other currencies without using INR as the base currency.
What are the Indian resident restrictions for forex trading?
It is illegal for Indian citizens to use online trading platforms and send rupees abroad for investment or conversion. Only SEBI regulated forex brokers can exchange foreign currencies.
Furthermore, the Indian government only recognizes GBP, USD, EUR, and JPY.
How to work with an international broker for forex trading in India?
We recommend that you hire the services of a professional to complete the basic procedures and legal consequences associated with investing with an international broker.
Forex trading penalties in India What is it like?
There are no penalties laid down by the Indian penal code for forex trading. However, you may attract the ire of legal authorities if you attempt to transact in a currency other than the dollar, pound, or Japanese yen, keeping the Indian rupee as the base currency.
Is Forex trading illegal in India?
Forex trading was legal in India until the time when the Indian National Rupee (INR) was taken as the base currency.