Best SEBI Registered Brokers in 2024

Forex and CFD trading is very popular in India although, like many other countries, the legality of the market is quite vague. Even today, many are confused about whether Forex trading is legal or illegal in India. According to Indian law, a Forex trade that involves a trade of two foreign currencies is indeed illegal, meaning Forex trading in India is legal only when the base currency is the Indian Rupee. Yet, there is a large number of offshore online stock brokers, offering online trading services to Indian traders and there are plenty of speculations that the Indian authorities will remove all restrictions in the near future.

Here’s where regulation comes in; Indian traders can only trade with SEBI approved Forex brokers. SEBI is the Securities and Exchange Board of India which was established in 1992 with a primary role in regulating the securities and capital markets in India.

If you are in India and want to trade in a safe trading environment, we would recommend using a SEBI registered broker. In this article, we will provide all the essential information about the forex trading legal status in India and include the top two stock brokers in India as of 2024.

What is a SEBI Regulated Broker?

Forex trading in India is considered as a “non-bailable” offense, however, you will be able to find many offshore Forex brokers offering trading services. The current status in India appears to be temporary and although there is no effective regulatory body allowing Indian or offshore companies to get a license to operate in India, Indian traders can still open a trading account with an offshore broker.

One thing is certain, whether the broker is offshore or domestic, it has to fulfill the rules and requirements of the Securities and Exchange Board of India (SEBI). Here are some of the main roles of SEBI:

• SEBI is responsible to protect investor interests and making sure their investments are safe
• Reducing financial fraud and manipulation, with a careful balance of self-regulation and financial requirements
• The development of a code of conduct for financial intermediaries
• Regulating the Indian securities market.

Best SEBI Regulated Brokers in 2024

Finding a broker that allows Indian investors to open an account is not an easy task. Yet, there are some top offshore online brokers that Indian investors can get access to. With that said, below you will find our top-rated SEBI brokers as of 2021.

What Should You Look for in a SEBI Regulated Broker?

The choice of your broker defines your trading activity and the trading tools you can use. The broker, in fact, links you to the market and allows you to get market execution. But while trading with stock brokers that offer a trading platform and market execution will require you to get information on external sources, some stock brokers provide the whole package, making trading an easier task. Here are some crucial factors to consider before you choose an online broker:

Regulation and Security

Forex and CFD brokers are not required to get authorized by SEBI in order to accept residents of India as clients. And indeed, the status of forex trading is confusing for Indian investors who want to enter the lucrative online trading world. Nevertheless, you can have the option to trade with an offshore well-established broker that allows you to get access to forex and CFDs. It’s important that you choose a broker that holds licenses from top-tier regulators in other regions of the world or has advanced security features to keep your funds in a safe place. Otherwise, if you insist on trading with a SEBI registered broker, you’ll have yo consider Interactive Brokers.

In terms of security features, you’ll have to find a broker that takes security threats and data protection seriously. CryptoRocket provides advanced security tools such as the Bitcoin Cold Storage, the 2FA (two-factor authentication), tier-one processing, and the human intelligent withdrawal execution.

Local Payment Method

The Foreign Exchange Management Act (FEMA) restricts the people of India to send or receive Indian Ruppe (INR) to overseas countries for the purpose of currency conversions or investments. Consequently, if you would like to trade with an offshore broker, you’ll have to find a broker that supports local payment for India (Interactive Brokers) or accepts deposits and withdrawals with bitcoin (like CryptoRocket).

Spreads and Fees

Forex brokers do not charge fixed trading commissions but instead, they make money through the buy and sell spread. There are two types of spread: fixed and variable. While fixed spreads remain unchanged in all market circumstances, variable spreads widen and tighten according to market conditions (liquidity, volatility, etc). It’s advisable that you choose one type over the other based on your trading style and the market hours you plan to be active on the market. If you are a day trader, you might prefer variable (floating) spreads but for those who execute a small number of trades in a week, fixed spreads can do the work for you.

Minimum Deposit Requirement

Each account type comes with a different deposit requirement. As a rule of thumb, it’s advisable to start small and grow your account once you feel comfortable with the broker, the trading platform, and the trading conditions. The majority of forex brokers have small deposit requirements that range between $10-$1,000 and a leverage ratio that varies depending on the region (the regulator), the account type (retail or professional), and the tradable asset. While Interactive Brokers, one of our recommended SEBI registered brokers, requires an initial deposit requirement of $500 and CryptoRocket allows users to open a trading account with $50.

Social Trading Platform

Whether you are a newbie or an experienced trader, you may find social trading a very attractive trading tool. Social trading simply allows you to find the top-performing traders on the broker’s network, get ideas, find posts, charts, and market-news, and copy the buy and sell strategies of other traders. The bottom line, it is a different way of trading compared to the traditional individualistic mode of trading.

Conclusion

Indian Forex brokers, whether domestic or foreign, are governed by SEBI but the Indian regulator is not yet issuing licenses for online stock brokers that operate through branch offices in India. Looking forward, it seems that the Indian financial authorities are giving in to the demand from forex traders and new legislations are expected to be launched to legalize online trading in India.

Meanwhile, Indian investors can trade through established stock brokers such as Interactive Brokers, and CryptoRocket.

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