@nithin@VenuMadhav - yes do confirm and let us know. Actually this is what I was given to understand by the exchange itself. The main constraint is however, UCCs cannot exceed 50.
Yes, discretion is not allowed. If your AP is acting on their own thats a problem - which is precisely where the fraud happens. But they can act as an extended arm to dispense broker’s house research. I think thats totally fine.
That said, its also the brokers diligence to see if the AP is competent enough to generate and give advise. It can also be the other way round where the AP advise is given to other broking clients. But yes, all advise whoever gives on broker’s behalf is broker’s compliance.
You’re right. I’m copy pasting the response I’ve received from our contact at NSE.
Maximum number of Client IDs allowed under this category will be 50. This is being allowed only to handle order flow of Family and Associate Firms / Companies and would include the following:
Individual - Self + Relatives**
HUFs of relatives
Firms in Which Self/ relatives jointly/severally hold interest of 51% or more
Companies in Which self/relatives jointly/severally hold interest of 20% or more
Partnership/LLP- Firms + Partners + their relatives**
HUFs of relatives
Firms in Which the firm or one or more partners or their relatives either jointly/severally hold interest of 51% or more
Companies in Which the firm/partners or their relatives jointly/severally hold interest of 20% or more
Corporate Company + Directors + their relatives ** + Holding Company + subsidiaries + Association companies (controlling interest 20% or more)
HUFs of relatives
Associate firms (controlling interest 51% or more)
Firms in Which the company or one or more directors or their relatives either jointly/severally hold interest of 51% or more
** The word ‘Relatives’ used above would be as defined under the Income tax Act, 1961 (plus HUF and maternal grandparents)
Yep - but most people wont qualify to get a membership as you need to have experience working with a SEBI registered intermediary before NSE can grant you membership or you need to employ someone who has.
For alpha membership i think anyone with 1Cr Net-worth and 45 Lakh NSE Deposit will get Membership. The retail license may have some sort of eligibility criteria .
@nithin any eligibility criteria for alpha membership? A Legal entity with above mentioned funds will get Alpha Membership?
1st of all the nature of business which in trading & F& O falls under finance category. when you are doing business 1st you need to define properly nature of business what you do. Here you need to clearly mention as **business of trading and dealing in shares and stocks, debentures, bonds, commercial paper and other securities of any description issued by Companies,Etc.
While mentioning this type of business one cant choose LLP OR OPC due to this nature of business are not allowed & you need to choose only Private limited company only. Due to tis falls under NBFC category under SEBI guidelines. Only private limited why means …tomorrow if you need to upgrade to NBFC & get SEBI license PLC are only allowed …Not LLP/ OPC.
Even while registering an company also with this nature of business MCA will not approve…we need to provide an declaration of when need we will take the license. Once business started immediately the License is no need 1st you need to do business of trading…in you books of accounts if you declare as there is profit & more than 50% of profit is coming from share trading & F & O then you need to upgrade by registering under NBFC & get SEBI license. All be will be about how you manage your Book of accounts.
Majority of people start trading in company is to save taxes. Many people will show nature of business as some thing & do trading which is as per law not right. above some people are shared videos of same. how can one define business as some thing & do some other business.
To be frank all this as not been properly monitored from SEBI… when they start doing this all will end up…so get proper guidance & start
What RBI Says;
You may need to get an NBFC license from RBI in the case of you doing this solely for the purpose of F&O trading you will fall under something called a 50-50 test. When the financial assets of the companies comprise of more than 50 % of the total assets and the income from financial assets amounts more than 50 % of the gross income, such businesses need to register with the RBI as an NBFC.
Needed only if yearly turnover is above Rs.20 lakh for services and above Rs.40 lakhs for goods. These are for normal category states. For special category states half of these amounts are the limits.
Special category states - Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim.
If u don’t mind, for what purpose would that be for ?
Option turnover doesn’t come under GST turnover estimation since you are not offering a product or service to third party. So a pvt ltd company can trade in derivatives without GST registration.
For a pvt ltd company to do this it needs to have NBFC license or be a stock broker or AP for a stock broker. Object clause in registration of the company with MCA should also clearly call out the broad purpose.
