How NRIs do Online Trading - Equity

Most of the reputable and registered brokers in India offer Online Trading facility in Equities for NRIs. Such Online NRI Trading Account opening involves the following:

1) Opening of Bank A/c with a PIS Designated Bank (DB).

2) Opening of Demat account with Broker.

3) Opening of Broking A/c with Broker.

What is a PIS Account?

PIS account (Mandatory for Indians living abroad): Portfolio Investment Scheme (PIS) allows NRIs to invest in shares of Indian companies, in secondary market, under repatriation or non-repatriation basis in respect of shares or convertible debentures sold or purchased through a registered stock broker on a recognized stock exchange. Any other modes of acquiring shares are not covered under this scheme ie, shares purchased through IPOs, as resident individuals, bonus shares etc.

What is a DMAT account?

Demat Account stands for a dematerialized account. The way one has to open a bank account if you want to park or save money; the very same way you need to open an online Demat Account for NRIs if you want to buy or sell stocks, and later save your stocks there in the Dmat Account. This Dmat happens to be maintained with a depository and is opened through a DP - Depositary Participant. At NriInvestIndia.com we specifically help NRIs, PIOs & OCIs to open a Online Dmat account in India. What is a Broking/Trading Account: Trading account is nothing but an account opened with a stock brokers, that would enable you to buy and sell shares or any other financial instruments through them.

NRI Mutual fund investment in India can be done in 2 different ways.

Categorically speaking:
1. Investments via using Power of Attorney.

2. Investments without power of attorney.

In general NRIs can invest into all major mutual funds like: Kotak Mutual Fund Franklin Templeton India Mutual Fund Birla Sunlife Mutual Fund Prudential ICICI Mutual Fund HDFC Mutual Fund TATA Mutual Fund Sundaram Mutual Fund Cholamandalam Mutual Fund Standard Chartered Mutual Fund DSP Mutual Fund Principal Mutual Fund SBI Mutual Fund Reliance Mutual Fund Deutsche Mutual Fund ABN AMRO Mutual Fund J M Financial Mutual Fund ING Vysya Optimix HSBC Mutual fund Fidelity AMC.

About the Author

Myself Aditya Sharma (Sr.Investment Advisor), and I work for a NRI Investment company (www.NriInvestIndia.com) that helps NRIs, PIOs and OCIs to invest in India's top mutual funds.

Here at NriInvestIndia.com we focus in delivering value service to our NRI clients when it comes to their investments in the Indian stock markets - NSE & BSE.

Can NRIs invest in Mutual Funds in India?

Non Residential Indians (NRIs) often ask whether they can invest in Mutual Funds in India or not. The answer is YES!! NRIs can invest in mutual funds in India and these investments can be made on a repatriable or on a non-repatriable basis, as preferred by the investor.

What is 'repatriable' basis?

To invest on a 'repatriable' basis, the NRI must have a Non Resident External (NRE) or FCNR Bank Account in India. The Reserve Bank of India (RBI) has granted a general permission to 'Mutual Funds' to offer mutual fund schemes on repatriation basis, subject to the following conditions:

1) The Mutual Fund should comply with the terms and conditions stipulated by Securities and Exchange Board of India (SEBI).

2) The amount representing investment should be received by inward remittance through normal banking channels, or by debit to an NRE / FCNR account of the non-resident investor.

3) The net amount representing a dividend / interest and maturity proceeds of units may be remitted through normal banking channels or credited to NRE / FCNR account of the investor, as desired by him subject to payment of applicable tax.

What is 'non-repatriable' basis?

The RBI has granted a general permission to 'Mutual Funds' to offer mutual fund schemes on non-repatriation basis, subject to the following conditions:

1) Funds for investment should be provided by debit to National Reconnaissance Office (NRO) account of the investor. Alternatively, funds may be invested by inward remittance or by debit to NRE / FCNR account.

2) The current income in the form of dividends is allowed to be repatriated.

It is important and useful to note here that no permission of the RBI either by the Mutual Fund or the investor is necessary.

Does an NRI need any approval from the RBI to invest in mutual fund schemes?

Many NRIs think that they need approval of the RBI to invest in mutual fund schemes in India. This is a myth. A NRI does not require any approval. Only the OCBs and FIIs require approval of the RBI to invest in mutual fund schemes.
 

About the Author

Myself Aditya Sharma (Sr.Investment Advisor), and I work for a NRI Investment company (NriInvestIndia.com) that helps NRIs, PIOs and OCIs to invest in India's top mutual funds.

Here at NriInvestIndia.com we focus in delivering value service to our NRI clients when it comes to their investments in the Indian stock markets - NSE & BSE.