Can An Investor Trade On the NSE or BSE From US Or UK Using Indian Account?

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Investors often ask if they can trade in Indian shares say from the US or UK using an Indian Trading and Demat account.

Can An Investor Trade On the NSE or BSE From US Or UK Using Indian Account?
To answer this question one of the most important things to consider is your residency status. If you are a Non Resident Indian (NRI) then you cannot trade using your existing trading and demat account. This also applies to Persons of Indian Origin (PIOs).

You have to open a Portfolio Investment Scheme (PIS) account and also another demat and trading account. If you continue to trade using your existing domestic account inspite of being a Non Resident Indian (NRI), then it is a violation of the law.

However, on the other hand if you are not a foreign citizen or NRI and a domestic citizen gone abroad on assignments or a tour, there is no harm in trading or investing.

Many individuals go on a short stay for a number of reasons and its perfectly alright to trade.

PIS Is A Must For NRIs

As per Reserve Bank of India guidelines, a Portfolio Investment Scheme is a must for Non Resident Indians (NRIs).

All sale and purchase transactions for NRIs and PIOs have to be routed through the PIS. What this means is that if you are an NRI or PIO and not following the above guidelines, it is a clear violation.

Many of the Indian banks including those in the private and public sector have branches abroad, which can help you open a trading, demat and PIS account.

These PIS accounts help you to buy and sell shares. Trading is not allowed by NRIs. You can open a a Portfolio Investment Scheme Account under NRE or NRO account.

You must intimate your broker when your residency status has changed from domestic to NRI.

GoodReturns.in

Read more about: nri, nse, bse, nre
Story first published: Friday, May 29, 2015, 11:43 [IST]
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