What are the trading restrictions for NRIs?
The trading restrictions for NRIs are as follows:
- NRIs can invest in equity delivery and trade in F&O. However, to trade in F&O, a custodian must be appointed and a Custodian Participant (CP) code is required. Zerodha has partnered with Orbis to provide custodial services. Client's with CP code cannot trade in BSE Futures and Options (BFO) segment for now. To learn more about Orbis, visit orbisfinancial.in/. For assistance with obtaining the CP code create a ticket.
- NRIs from USA and Canada cannot invest in mutual funds. NRIs from other countries can invest, if they have a NON-PIS account. To learn the differences between a PIS and Non-PIS account, see What are the documents required to open a Zerodha account as an NRI?
- Intraday trading in equity is not allowed.
- Sovereign Gold Bonds (SGBs) cannot be bought in the primary market.
- Buy Today Sell Tomorrow (BTST) trades are only allowed for Non-PIS accounts.
- Intraday trading in F&O is allowed if the client has a CP code.
- Trading in the currency and commodity segments is not allowed.
- If an NRE account is mapped, only equity trading would be allowed.
- If an NRO account is mapped, either equity delivery or F&O would be allowed.
- NRIs cannot pledge securities as collateral to trade in F&O.
Did you know? An NRE and an NRO account can be mapped to the Zerodha account. Submit two account opening applications to map both accounts. To learn the difference between NRE and NRO accounts, see What is the difference between an NRE and NRO bank account?
Related articles
- How can an NRO PIS account be converted to an NRO Non-PIS account?
- What is the commodity declaration option in the Account section on Console?
- Why is there a restriction in placing new NRML orders in some currency contracts?
- What happens when a NRI-minor account holder completes 18 years of age?
- How to open a non-individual commodity account if an equity account already exists?
I'm well-versed in the realm of trading restrictions for Non-Resident Indians (NRIs). To demonstrate my expertise, let's delve into the details:
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Equity Investment and F&O Trading: NRIs have the green light for equity delivery investments and can engage in Futures and Options (F&O) trading. However, F&O trading necessitates the appointment of a custodian, obtaining a Custodian Participant (CP) code, and currently, Zerodha collaborates with Orbis to offer custodial services.
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BSE Futures and Options (BFO) Segment: Presently, clients with a CP code are unable to trade in the BSE Futures and Options (BFO) segment.
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Mutual Fund Investments: NRIs from the USA and Canada face restrictions and are not permitted to invest in mutual funds. However, NRIs from other countries can invest, provided they possess a NON-PIS account.
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Intraday Trading and Other Restrictions: Intraday trading in equity is prohibited for NRIs. Sovereign Gold Bonds (SGBs) can't be purchased in the primary market. Buy Today Sell Tomorrow (BTST) trades are exclusive to Non-PIS accounts.
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Trading Segments: Currency and commodity segments are off-limits for NRIs. However, intraday trading in F&O is permissible if the client holds a CP code.
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Account Mapping Impact: Depending on whether an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account is mapped, it affects the allowed trading activities. NRE accounts enable equity trading solely, while NRO accounts permit either equity delivery or F&O trading.
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Securities Pledging: NRIs are barred from using securities as collateral for F&O trading.
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Account Mapping and Zerodha: Zerodha allows the mapping of both NRE and NRO accounts to their platform. This involves submitting two account opening applications.
Regarding the additional concepts in the related articles:
- Conversion of NRO PIS Account: Explains the process of converting an NRO PIS account to an NRO Non-PIS account.
- Commodity Declaration Option: Discusses the commodity declaration feature in the Account section on Console.
- Restriction on NRML Orders in Currency Contracts: Explains why there are limitations on placing new NRML orders in certain currency contracts.
- Transition of NRI-Minor Account Holders: Describes what occurs when an NRI-minor account holder reaches 18 years of age.
- Opening Non-Individual Commodity Account: Provides guidance on opening a non-individual commodity account if an equity account already exists.
If you're seeking further assistance or clarity on any of these topics, creating a ticket would be the best course of action.
