NRO NON-PIS account FO trading

General
1

Hi ,

With the arrival of NRO NON-PIS accounts, I have questions on the following:

  • NRIs cannot pledge their holdings while trading to obtain margins.
    ->> any idea why is it so? , NON-PIS account is as good as resident account. Is there a remote chance for this to be enabled for NRO? why should NRI pay from the pocket for margin when there are equities that can be pledged?
  • NRIs cannot trade both Equity and F&O simultaneously.
    ->>This is also looking like a strange rule. By any chance , is there any remote chance for this to be enabled for NRI?

Please clarify.

2

  • RBI regulations are specific about pledging. Pledging for NRI is mainly allowed for business purposes and not for trading. Also, since FnO has to come via the CP code route, one can trade either in Equity or FnO. So even if there is pledging, this would not help.

  • As per regulations, to trade in FnO one has to come via the custodial participant(CP) route. To issue CP codes, one has to be a professional clearing member (PCM). Today Zerodha operates as a self-clearing member. In future, if we think of the PCM route, we can allow both segments under one umbrella.

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Hope this helps.

1 Like
3

Thank you very much for the clarifications. Are you aware of any ETA for this to be available in Zerodha?
Or is there any broker in India who has already done this?