Benefits of Overseas Trading Through Electronic Mode

Today, many residents and Indian companies are investing in overseas foreign trading business, as it yields them good returns on it. There are many online portals which offer lucrative securities provided by different international companies. Such works are carried out by brokers or middlemen, who help the investor's in finding the best offers available in the International market.
The Reserve Bank of India, along with the regularized bodies, formulated rules in order to curb many malpractices by the foreign companies or middlemen. These bodies have cautioned many small investors to check the market condition and the value of the shares, before getting into any deal.
The government has authorized the schedule banks and nationalized banks to evaluate the foreign investment schemes available for investors. The banks evaluate the prices quoted for the purchase of shares in the international market in order to ensure that they are not more than the original ones. The investors can remit their funds through one of the following methods -

1. Bank transfer
2. Online transfer through debit card or credit card.
3. Paying it to the broker or middlemen.

It has been notified by the central government that the broker, company, or middlemen who directly or indirectly collect funds from Indian residents would be responsible for proper utilization of the funds and earn best returns. The companies, brokers, or middlemen would be held liable for any non compliance and can face legal charges, if they deviate from any norms mentioned by FEMA
The authorized dealers or the foreign securities issuing companies are required to refer the rules and instructions notified by the investors. This would help in controlling any unauthorized or illegal transactions, which can impact the interest of the investors. As per the current FEMA rules, 1999 doesn't allow the Individuals to invest in various domestic or overseas markets through one of the electronic mode.
These individuals are however allowed to invest in the following manner -

1. Currency Future- When the individual enters into a contract of purchasing or selling of foreign shares, which is future-dated and has an expiry date.
2. Optional Trading- In this type of speculative business, the investors can purchase securities and shares, which have no expiry date, as it allows them to earn best dividends.

The investors have to notify the market value of the shares and inform the same to the prospective customers and enough care is taken to control any cost manipulation by the authorized dealers. An individual can open a demo account, transact and transfer the money to any Indian bank.
Online trading many a times differs with the products and the market securities. There are many types of trading which are as follows -

1. E-speed Electronic Trading - It indicates that the trading can be carried out with different types of securities. It is very common with some of the developed countries that allow international investment through forex.
2. Many international trading has opted for electronic mode or online trading method for purchase and sales of the shares from the international market. There are special techniques for trading.

Ms. Sowmya Somaiah is a Company Secretary and Founder of "Sunshine Corporate Solutions Pvt Ltd" at Bangalore, India. For more information visit http://www.sunshinecorp.biz