A) DOCUMENTS REQUIRED FOR OPENING TRADING ACCOUNT FOR NRI/NRE/NRO
1. PAN Card – It Should be signed by client and attested by any one of given- consulate general/notary public/any court/Magistrate/Judge/local banker in the country where the Non resident resides.
2. Address Proof- Indian & Abroad.
List of address proofs:
a) Passport e) Rent Agreement
b) Driving License f) Telephone/Electricity Bill
c) Ration Card g) Flat Maintenance
d) Election/Voting card
3. Proof of Demat A/c with NRI status mentioned on it.
4. Saving Bank A/c proof of NRI/NRE/NRO status printed on it required along with cancelled cheque.
5. In case of NRE/ NRI/ a/c PIS- Repatriation letter of bank required.
In case of NRO a/c PIS- Non Repatriation letter of bank required.
6. Full Copy of Passport along with date stamp for the period during which he/she was in India.
7. Financial details proof (Income tax return/six month bank statement/ audited accounts/Net worth certificate by a qualified chartered accountant).
8. Full copy of VISA, if any.
- If the applicant has submitted PIO card (Person of Indian Origin) for trading a/c opening then in that case we can treat the a/c as NRI a/c or Individual a/c(as per documents given).
B) FAQs FOR NRI – TRADING ACCOUNT
Q1 Who is a non-resident Indian (NRI)?
Ans :- Non-Resident Indian (NRI) means a “person resident outside India” who is
a citizen of India or is a person of Indian origin”[as per FEMA regulations]
Q2 Can NRI invests in shares in India through a stock exchange?
Ans :- Yes, NRI can purchase shares or convertible debenture of an Indian
Company through stock exchanges, under the portfolio investment
scheme on repatriation and /or non repatriation basis.
Q3 Can NRI/PIO invests in other securities?
Ans :- Yes, NRI/PIO can invest in other securities namely
1. Dated Government securities (other than bearer securities) or
2. Units of domestic mutual funds.
3. Bonds issued by a public sector undertaking (PSU) in India.
4. Shares in Public Sector Enterprises being disinvested by the
Government of India.
Q4 Are NRIs allowed to invest in Exchange Traded Funds (ETFs)?
Ans :- Yes, NRIs are allowed to Invest in Exchange Traded Funds (ETFs). NRIs
can invest in ETFs both on repatriation as well as non repatriation basis.
Q5 How can NRIs invest in shares in India?
Ans As per Reserve Bank of India (RBI) guidelines, NRI who wishes to invest
in shares in India through a stock exchange need to approach the
designated branch of any authorized dealer (bank) authorized by reserve
bank to administer the PIS (Portfolio Investment Scheme) to open a NRE
(Non Resident External) /NRO (Non Resident Ordinary) account under the
scheme for routing Investments.
Q6 What is a designated bank branch?
Ans :- Reserve bank of India has authorized few branches of each authorized
dealer bank to conduct the business under portfolio investment scheme on
behalf of NRIs. NRI can select only one authorized dealer bank for the
purpose of investments under portfolio investment scheme and route the
transactions through the branch designated by the authorized dealer bank.
Q7 What is a Portfolio Investment Scheme (PIS)?
Ans :- Portfolio Investment Scheme (PIS) is a scheme of reserve bank of India
under which –
Non Resident Indian (NRIs) can purchase/sell shares/convertible
debentures of Indian companies on Stock Exchanges under Portfolio
Investment Scheme. For this purpose, the NRI/PIO has to apply to a
designated branch of a bank, which deals in Portfolio Investment. All
sale/purchase transactions are to be routed through the designated
Q8 Who is a person of Indian Origin?
Ans :- For the purposes of investments in shares/securities in India, person of
Indian origin means a citizen of any country other than Pakistan or
a) he at any time, held an Indian passport; or
b) he or either of his parents for any of his grand parents was a citizen of
India by virtue of the constitution of India or Citizenship Act, 1955 (57
of 1995); or
c) the person is a spouse of an Indian citizen or a person referred to in
clause (a) or (b)
Q9 Who is an overseas citizen of India (OCI)?
Ans :- Under OCI Scheme operational from 02nd Dec 2005 government of India
decided to grant overseas citizenship of India (OCI) commonly known as
“dual citizenship”. A foreign national, who was eligible to become a
citizen of India on 26.01.1950 or was a citizen of India on or at anytime
after 26.01.1950 or belonged to a territory that became part of India after
15.08.1947 and his/her children and grand children, provided his/her
country of citizenship allows dual citizenship in some form or other under
the local laws, is eligible for registration as an Overseas Citizen of India
(OCI). Minor children of such person are also eligible for OCI. However, if
the applicant had ever been a citizen of Pakistan or Bangladesh, he/she
will not be eligible for OCI.
Q10 Can PIO (Person of Indian Origin) as well as OCI (Overseas Citizen of
India) also invest in shares in India?
Ans :- Yes, PIOs and OCIs do have a parity with NRIs in respect of all facilities
available to the NRIs in the economic, financial and educational fields
except in matters relating to the acquisition of agricultural/ plantation
Q11 What is an Overseas Corporate Body (OCB)?
Ans :- ‘Overseas Corporate Body’ means a company, partnership firm, society
and other corporate body owned directly or indirectly to the extent of at
least sixty percent by Non-Resident Indians and includes overseas trust in
which not less than sixty percent beneficial interest is held by Non-
Resident Indians directly or indirectly but irrevocably.
Q12 Can Overseas Corporate Body (OCBs) also invest in shares in India?
Ans :- OCBs have been prohibited from making investments under Portfolio
Investment Scheme. OCBs have been de-recognized as a class of
investor entity w.e.f. September, 16, 2003. Further, the OCBs which have
already made investments under the PIS are allowed to continue holding
such shares /convertible debentures till such time these are sold on the
Q13 What are the documents required to be collected from Investor to
open a NRI/PIO/OCI trading account?
Ans :- List of documents to be taken while registering NRI/PIO/OCI Clients as
may be applicable
Document ensuring status of entity
_ In case of Indian passport – Valid passport, Place of
birth as India, Valid Visa –
Work/Student/employment/resident permit etc.
_ In case of foreign passport : Valid passport and any of
• Place of Birth as India in foreign passport
• Copy of PIO / OCI Card as applicable in case
PIS Permission Letter from the respective designated bank
Overseas Address Driving License/ Foreign passport /Utility Bills/
Bank statement (not more than 2 months old)/
Notarized copy of rent agreement/ leave &
license agreement/ Sale deed.
Photograph of Investor.
Proof of respective bank accounts & depository accounts.
Q14 What are other client registration formalities to be taken care while
registering NRI/PIO/OCI Clients?
Ans :- In case of NRI/PIO/OCI client registration documents are required to be
executed by client himself and not by Power of Attorney Holder. In case of
In-person verification of such clients, the members may obtain from such
clients KYC documents attested by any one of the following entities –
Indian Embassy/Consulate general in the country where the client resides,
Notary Public, Court, Magistrate, Judge or Local banker.
Q15 Is it mandatory for a client to provide local (Indian) address?
Ans :- At the time of client registration, client needs to provide its foreign address
along with documentary proof of the same. If client so desire it can keep
its local address as correspondence address. In such scenario additionally
they are required to provide documentary evidence in support of local
Q16 Can two separate trading accounts namely (NRE & NRO) can be
opened by NRI?
Ans :- Yes, clients can have two separate trading accounts based on NRE &
Q17 What are the additional requirement with respect to contract notes?
Ans Contract notes in original for both purchase and sale transactions needs to
be submitted with in the time specified by the designated bank to enable
designated banks to report the same to Reserve Bank of India.
Q18 What precautions trading member needs to take while dealing with
Ans :- Trading member need to ensure that
Securities are not in RBI ban list before executing the order.
Clear funds are available for purchases.
Securities are available before executing any sell order.
Depending upon whether the purchases are made on repatriation /
non-repatriation basis pay-out of the securities needs to be
transferred to respective de-mat account.
Purchase/Sale transactions in cash segment should be settled by
Q19 Is there any ceiling on the Investments under the Portfolio
Ans :- NRIs are allowed to invest in shares of listed Indian companies in
recognized Stock Exchanges under the PIS.
a. NRIs can invest through designated ADs, on repatriation and nonrepatriation
basis under PIS route up to 5 per cent of the paid- up
capital / paid-up value of each series of debentures of listed Indian
b. The aggregate paid-up value of shares / convertible debentures
purchased by all NRIs cannot exceed 10 per cent of the paid-up capital
of the company / paid-up value of each series of debentures of the company.
c. The aggregate ceiling of 10 per cent can be raised to 24 per cent, if the
General Body of the Indian company passes a special resolution to
Q20 How payments could be made by NRIs for shares purchased on
Ans :- Payment for purchase of shares and/or debentures on repatriation basis
has to be made by way of inward remittance of foreign exchange through
normal banking channels or out of funds held in NRE/FCNR(B) account
maintained in India. If the shares are purchased on non-repatriation basis,
the NRIs can also utilize their funds in NRO account in addition to the
Q21 How NRIs/PIO can remit Sale proceeds?
Ans :- In case of NRI/PIO, if the shares sold were held on repatriation basis, the
sale proceeds (net of taxes) may be credited to his NRE /FCNR(B)/NRO
accounts of the NRI/PIO, whereas sale proceeds of non repatriable
investment can be credited only to NRO accounts
Q22 Can an NRI transfer shares purchased under PIS to others under
Ans :- Shares purchased under PIS on stock exchange shall be sold on stock
exchange only. Such Shares cannot be transferred by way of sale under
private arrangement or by way of gift (except by NRIs to their relatives as
defined in Section 6 of Companies Act, 1956 or to a charitable trust duly
registered under the laws in India) to a person resident in India or outside
India without prior approval of the Reserve Bank.
Q23 Can an NRI purchase securities by subscribing to public issue?
What are the permissions/approvals required? How can those shares
Ans :- Yes. The issuing company may issue shares to NRI on the basis of
specific or general permission from GoI/RBI. Therefore, individual NRI
need not obtain any permission. While seeking the credit of sale proceeds
to NRE/NRO account, the designated bank should be provided with the
details regarding date of allotment and cost of acquisition to calculate the
taxes, if any.
Q24 Can NRI do Intra-day transactions in cash segment?
Ans :- No, NRI Investor has to take delivery of shares purchased and give
delivery of shares sold. Short Selling is not permitted.
Q25 Can NRI trade in futures & options segment of the Exchange?
Ans :- Yes, NRIs are allowed to invest in futures & options segment of the
exchange out of Rupee funds held in India on non repatriation basis,
subject to the limits prescribed by SEBI.
Q26 Can NRI trade in Currency derivative segment of the Exchange?
Ans :- No, Only “a person resident in India” as defined in section 2(v) of FEMA
Act 1999 are allowed to participate in currency derivative segment of the
Q27 Can trading account be opened for person’s resident outside India
who had been allotted shares under ESOP scheme?
Ans :- Listed Indian companies are allowed to issue shares under the Employees
Stock Option Scheme (ESOPs), to its employees or employees of its joint
venture or wholly owned subsidiary abroad who are resident outside India,
other than to the citizens of Pakistan. Trading account can be opened for
person’s resident outside India only for the sole objective of selling of
shares acquired under ESOP Scheme.
Q28 Can rights/bonus shares be issued to NRI?
Ans :- FEMA provisions allow Indian companies to issue Rights / Bonus shares
to existing non-resident shareholders, subject to adherence to sectoral
cap as may be applicable
Q29 What needs to be done by NRIs for trading in Futures & Options
segment of the Exchange?
Ans :- An NRI, who wishes to trade on the F&O segment of the exchange, is
required to approach the exchange through a clearing member, through
whom the NRI would like to clear his trades for allotment of custodial
participant (CP) code. Clearing corporation would assign a CP code to
each NRI, based on the application received from the clearing member of
the NRI. Trading members should ensure that at the time of order entry
CP Code of the NRI is placed in the CP Code field of the trading system.
The NRI client shall have only one clearing member at any given point of
Q30 What are the limits applicable to NRI in Exchange Traded Derivative
Ans :- Position limits would be applicable on the combined position in all
derivative contracts on an underlying stock at an Exchange. Position limits
for NRIs shall be same as the client level position limits specified by SEBI
from time to time.
For Index based contracts – Disclosure requirement for any persons or
persons acting in concert who together own 15% or more of the open
interest of all derivative contracts on a particular underlying Index.
For Stock option and single stock futures contracts –
The gross open position across all the derivative contracts for a security
for each specific client shall not exceed higher of:
1% of the free float market capitalization (in terms of number of shares)
5% of the open interest in all derivative contracts in the same underlying
stock (in terms of number of shares)
Client level position limits security-wise, are made available to members
on NSE’s website (www.nseindia.com).
Q31 How Investment positions of NRIs are monitored?
Ans :- Reserve Bank monitors the investment position of NRIs/FIIs in listed
Indian companies, reported by designated banks, on a daily basis.
When the total holdings of NRIs/FIIs under the Scheme reaches the limit
of 2 percent below the sectoral cap, Reserve Bank will issue a notice
(caution list) to all designated branches of designated banks cautioning
that any further purchases of shares of the particular Indian company will
require prior approval of the Reserve Bank.
Once the shareholding by NRIs/FIIs reaches the overall ceiling / sectoral
cap /statutory limit, the Reserve Bank places the company in the Ban List.
Once a company is placed in the Ban List, no NRI can purchase the
shares of the company under the Portfolio Investment Scheme. List
of caution/banned RBI scrip is available at
Q32 In case a person who is resident in India becomes a non-resident,
will he/she be required to change the status of his/her holding from
Resident to Non-Resident?
Ans :- As per section 6(5) of FEMA, NRI can continue to hold the securities
which he/she had purchased as a resident Indian, even after he/she has
become a non resident Indian, on a non-repatriable basis.
Q33 In case a non-resident Indian becomes a resident in India, will he/she
be required to change the status of his/her holding from Non-
Resident to Resident?
Ans :- Yes. It is the responsibility of the NRI to inform the change of status to the
designated authorized dealer branch, through which the investor had
made the investments in Portfolio Investment Scheme and the DP with
whom he/she has opened the demat account. Subsequently, a new demat
account in the resident status will have to be opened, securities should be
transferred from the NRI demat account to resident account and then
close the NRI demat account.
Q34 In case a non-resident Indian becomes a resident in India or vice
versa, will he/she be required to open a new trading account?
Ans :- Yes, Trading member needs to open a new trading account which needs
to be uploaded with the new category code (01 – Resident Individual) &
(11 – NRI) as may be applicable.
RBI Master Circular dated RBI/2010-11/13 dated July 01, 2010.
FAQ hosted on RBI website www.rbi.org.in
NSE Circular dated Nov 27,2003 , NSE/INVG/2003/4593
NSE Circular dated Dec 21,2004 , NSE/MEM/5676
NSE Circular dated Jul 04,2008 , NSE/INSP/10938
This FAQ is prepared based on Exchange’s understanding of FEMA regulations.
While utmost care has been exercised while developing the FAQs, NSE does not
warrant the completeness or accuracy of the information and disclaims all
liabilities, losses and damages arising out of the use of this information. The
readers are requested to keep abreast of the changes taking place in the underlying
provisions of RBI.