Is it legal to trade stocks in USA's stock exchanges as an Indian citizen?

#23

@nithin: I tried contacting the broker and RBI. Broker is redirecting me to RBI for clarification. RBI is silent. Can you please use your contacts to get a clear answer from RBI for the benifit of this group ?

An example of an ETF is http://www.proshares.com/funds/psq.html

Its a problem that regulators like RBI dont respond to queries via their website. Its been almost 2 weeks.

#24

This is grey, no one will give clarity. You as an end user is the safest in terms of regulation, so if a platform is offering, I guess you can buy it. If asked, you can always say I didn’t know. :slight_smile:

#25

I don’t have enough knowledge about this topic but i think that there is no law breaking if you do it. I think that you need a Social Security Number to do stock trading in the market. You will have the number if you are living there. Maybe the other forum members will help you more efficiently.

#26

Compliance and regulation involved in the process is discouraging as you would have realized now that you’re actively looking into the process. An alternate solution could be in the form of employing various mutual fund products that invest in US Securities if all you’re really looking for is some exposure to the US markets. Hope this helps. Cheers.

#27

@nithin It’s been over a couple of months :upside_down_face:

#28

:slight_smile: too many things to solve for (multiple regulators, registrations, FEMA, remittance, etc), will take some more time. Btw we have the streaming bit ready, so hopefully you should soon be able to add US stocks on marketwatch and start seeing live feeds/charts etc.

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#29

this is good news. Now its confirmed that it is going to happen.

#30

Its a good thing that we get to rade the biggest stock exchange. But i have a question. is it a really that good and better than the indian markets. Of course their stocks perform well and volume is high. Is there any other advantage over this?
like is the leverage allowed more? etc.
can someboddy shed some light here

#31

Hmm… you are allowed to only invest and not do any leverage trades or intraday trades etc. What is good is that you get to diversify your portfolio and reduce some India risk that it might carry. Also gives you access to companies whose products you might be currently using (uber, netflix, google, amazon, etc).

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Overseas Index Options in Icici Direct
#32

@nithin in my understanding LRS is applicable to resident individuals. What if I set-up a trading company and open a trading account in with US broker to trade leveraged instruments? Is this legal? Well, I mean setting-up an Indian Company not any offshore company. Thanks in advance

#33
#34

You can hedge as a company, like an export company against currency, steel company against raw material products, etc. But you can’t just do derivatives trading.

The only way I can think of is by setting up an AIF (Hedge fund). Check point 34

https://www.sebi.gov.in/sebi_data/attachdocs/1471519155273.pdf

This has been now increased to USD750 million.

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#35

That means hedge funds set up in India are allowed to do leveraged trading in foreign markets.

#36

Very interesting and it will be very profitable for us if all of this is at least half true. What kind of returns anybody getting with allowed stocks for Indian, I would love to see something, some real news from that. Good to see there is double taxation as well in question.

#37

Checking the SEBI circular no. CIR/IMD/DF/7/2015 referred to over here: https://www.sebi.gov.in/legal/circulars/oct-2015/guidelines-on-overseas-investments-and-other-issues-clarifications-for-aifs-vcfs_30772.html , point 2.B.c. states that

i. AIFs may invest in equity and equity linked instruments only of offshore venture capital undertakings, subject to overall limit of USD 500 million (combined limit for AIFs and Venture Capital Funds registered under he SEBI (Venture Capital Funds) Regulations, 1996).

iii. For the purpose of such investment, it is clarified that “Offshore Venture Capital Undertakings” means a foreign company whose shares are not listed on any of the recognized stock exchange in India or abroad.

iv. Investments would be made only in those companies which have an Indian connection (e.g. company which has a front office overseas, while back office operations are in India).

So, it is pretty limited and not very useful. Also commodities are not mentioned, whereas the biggest commodity exchanges with the highest liquidity in the world are in the US. If foreign investors are allowed to trade on Indian commodity exchanges and make profits, why not allow Indian traders to make profits in foreign exchanges and bring it back to India?

#38

Indian residents trading in US Equities will be taxed in India itself right?

#39

You mentioned only investing is allowed not intra day trading in US, can you link anything to verify that.

Coz I have been trading in US through webull, also interactive brokers says it’s legal other than investing in crypto.

#40

are you trading leveraged products from the US markets?

#41

I mean no leveraged products are allowed. Can check this RBI circular.

#42

Dear Siva,
RBI & SEBI both are not allowing to grow retailer wealth in stock market ,
margin system are very badly handling by SEBI , as you are big broker let rise against margin policy to SEBI,