FAQ's

Need help?

We have compiled a list of most common queries in the Q&A form and categorised them in key topics. Click on the relevant topic to find the answer to your question.

1. MOST ASKED QUESTIONS

Opening account with Arihant is a simple 3-step process:

1.Go to Open An Account section and download Arihant KYC Form from our website / get a physical copy from your nearest Arihant Investment Center and complete it with details and your signature.

2.Submit self-attested copy of your identity proof, address proof and other requisite documents

3.Sign across Application Form at all places

Once, you are done with the above, submit your form to your nearest Arihant investment centre and you are ready to start investing with us. OPEN AN ACCOUNT now!

Arihant offers two login options for its website users: Client Login for registered clients who have a demat and/or trading account with us and My Arihant User Login for non-client website registered users. Depending on what kind of user you are you can login in the following manner:

Arihant Client Login - If you are an Arihant client your username is your trading code {also known as your terminal code} and your password is 8 digit long and alpha numeric.

My Arihant Registered User Login - If you are not a Arihant customer then you are a My Arihant user and your username will be the email address you registered on www.arihantcapital.com with. Your password is 8 digit long and alpha numeric.

In case you have forgotten your password (both for clients and non-client users), please select the Forgot Password option provided on the login page and fill in your trading code or email ID and the reset instructions will be sent to your registered email ID. Make sure to choose the appropriate tab when requesting for password reset - Client & Not an Arihant Client Tab.

For more details visit the Login Help page.

For forms and applications, click on the Application & Form Center section. Here you will find the application forms to open an account.

Yes, at Arihant our goal is to make our clients grow with us. Our advisors will assist you in reviewing your portfolio based on current market scenario and advise you as per your needs. For portfolio review assistance, you can email us at research@arihantcapital.com.

To download and install Arihant's online trading and mobile trading platforms, go to our Download Center and follow the instructions.

If you have online trading facility activated in your account, you can transfer funds directly from your online trading software by going on Payin Option. This will redirect you to your bank's website from where you can transfer funds to Arihant account.

If you are an offline client or not logged in to your trading account then click here to transfer funds directly to your Arihant trading account and start investing.

2. EQUITY FAQS

Investing in equities/shares offers many benefits over other asset classes like a high level of liquidity which unlike property, gives you ready access to your money. There are more than 4,000 companies listed on the exchange in which you can buy shares to match your investment needs. Other benefits include:

Returns: Equities can help you build long-term growth into your overall financial plan. Shares can produce significant capital gains through increase in share prices over longer term.  In addition, stocks pay dividend income and some companies even issue bonus shares to their shareholders which is another way of passing on company profits.

Ownership: Stock represents share in ownership or equity stake in a company. If you are a stockholder, you own a proportionate share in the company’s assets. That means you gain part ownership of the company.

Tax Benefits: Dividend income generated from shares is completely tax-free. Long-term capital gains arising on equity investment is not taxed by the government. That means, if you invest in a company and keep the shares for 12 months, you don’t need to pay any tax on income you earn on selling the shares after 12 months. Short term capital gains tax on shares is also just 15%, while investment in other asset classes attracts short-term capital gains tax of 30%.

Control over your financial future: You can choose to invest independently using your knowledge and expertise, share this responsibility with Arihant who can advise you on what shares to buy and sell or ask Arihant to manage portfolio for you.

To invest in equities you need to open a trading and demat account with a stock broker as directly investing in the Company through the stock exchange is not permitted. You can open an account with Arihant and invest in any Company listed on National Stock Exchange (NSE) and The Bombay Stock Exchange of India (BSE).

After registration, you will be required to deposit with us a certain amount as initial margin deposit. There is no fixed minimum stipulated amount, but for ease of your trading operations an amount of Rs 5,000 is recommended.

Once your account is opened, you can start trading immediately if you already have a Demat account. If you do not have a demat account, then along with your trading account you will be required to open one which would require 1 working day to activate, if all your documents are in order. Once both the accounts are opened, you can start to trade straight away.

If you wish to trade online, you are required to fill and submit our internet trading authorization form by email to online.trading@arihantcapital.com and you will receive a password by email within 24 hours of your application request. You are now ready to place your trades with Arihant.

You can start trading after you have funded your account and those funds have been cleared.

Choose the method that works the best for you:

  • By RTGS/NEFT: You can deposit the requisite amount in our designated bank account through RTGS/NEFT, for further details regarding bank a/c details you can call us at: 0731-3016100.
  • By Cheque: You can send us a cheque made payable to Arihant Capital Markets Ltd. along with your application form.
  • By Net Banking: You can also transfer funds electronically to our bank account if you have net banking facility activated. For online fund transfer details, click here.

You can trade in any of the following ways with As an Arihant share dealing customer, you can trade in a number of ways.

Arihant:

  • Online trading: You can trade online through India’s best online trading platforms suitable for every type of investor. For details of available trading platforms click here.
  • Mobile trading: Trading is now available on your fingertips with our mobile trading application available on iPhone and Android. For details click here.

  • Tele-trade: With our Tele-trade service, you trade just through making a phone call. Arihant offers a dedicated telephone trading service at all its branches that allow you to buy and sell shares and derivatives listed on NSE and BSE.
  • With a broker's assistance: Take control of your finances at Arihant Investor Centre, where you are provided with a range of information and tools to make investing easy. In our Investor Centre you can:
    • Place stock trades with the assistance of a professional, certified Arihant operator
    • Open an account and choose from our wide range of products and services
    • Speak face-to-face with our experienced Investor Centre Representatives
    • Make cheque or stock deposits
    • Access real-time share price quotes
    • Keep up-to-date with company and market news as it breaks
    • Invest in mutual funds or IPOs
    • Use our research facilities
    • Access our daily trading calls based on Technical Analysis

Access our daily trading calls based on Technical Analysis

We ensure that all your information is secured and do not pass it on to any third parties. The privacy and security of the information is strictly maintained. All the call logs are recorded to ensure your account is safe and no mis-trading happens on the same.

Yes when you open your account with Arihant, if you have selected futures and options trading option then you can trade in F&O through your trading account. We also offer online trading in F&O. To know more about our derivatives trading services, click here.

Yes, we offer our customers complete online support. Once you open an account with us, we will send you a unique username and password, with which you will be able to access your account online. Our executive will guide you on how to check your account and trade details online. You can also login to your account through the website login page and access a host of features including full research, demat account, online backoffice, important notice and alerts all at one place through your Client Dashboard.

3. COMMODITIES FAQS

India has two key multi commodity exchanges – MCX and NCDEX, through which electronic trading on various commodities is available for individuals. These exchanges have electronic trading and settlement systems making it easy to trade in commodity futures.

To start trading you need to open a trading account with Arihant and once it is activated you are good to go.

You need to provide certain mandatory documents along with your Commodity Trading Account Opening Form to open your account. The documents list includes:

  • PAN Card self-attested copy
  • Address proof (passport, driver’s license, latest electricity bill, latest bank statement)
  • Income proof (IT acknowledgement copy, 6-month Bank statement (will also act as an address proof), Stock Holding Statement, or the CA certifying your networth)
  • Passport sized photo
  • Cancelled cheque with your name printed on it

You can download your commodities trading account application form from here. Contact us for any queries.

The following commodities are actively traded in these two Exchanges:

Multi Commodity Exchange (MCX)

  • Bullion: Gold, silver and platinum
  • Metals: Aluminum, copper, lead, nickel zinv, tin
  • Oil and Oil Seed: Crude palm oil, refined soy oil, soy bean
  • Energy: Brent crude oil, crude oil, natural gas
  • Spices: Cardamom, coriander
  • Other commodities: Mentha oil, sugar, guar gum, guar seed, potato, chana

 

National Commodity & Derivatives Exchange (NCDEX)

  • Bullion: Gold and silver
  • Metals: Steel and copper
  • Oil and Oil Seed: Castor seeds, castor seed oilcake, crude palm oil, soy oil, soy bean, mustard seed
  • Energy: Brent crude oil, and crude oil
  • Spices: Pepper, turmeric, jeera, chilli, coariander
  • Agro Commodities: Chana, bajra, barley, maize,
  • Other commodities: guar gum, sugar, rubber

This is not an exhaustive list and the tradable commodities list is also regularly updated with new commodities added by the exchange(s) and old being banned by the government or removed by the exchange(s). For latest list of tradable commodities please visit www.mcxindia.com and www.ncdex.com

Yes we do. We have a dedicated team for commodity research that actively tracks commodities, markets, economic factors, global scenario and other parameters and provide technical as well as fundamental research on various agro and non-agro commodities. For more details visit our Commodity Research Center.

For every trade on commodities the following charges are levied:

  • Brokerage
  • STT/CTT (on sell side on non-agri commodities)
  • Service tax as per current applicable rates
  • Exchange transaction/turnover charges
  • SEBI charges
  • Stamp duty (as per state law)

Yes. Exchanges and regulators have defined a maximum permissible limit on holding a particular commodity for client as well as for the member. This limit varies from commodity to commodity and exchange to exchange. Please see contract specification on exchange website for position limit at client and member level at www.ncdex.com and www.mcxindia.com.

Unlike equity, since commodities are directly linked to international prices their trading timings differ from equity trading. For normal sessions the trading timings are (as on 04 March 2016):

Particulars

Current Trade Timings

Agricultural  Commodities (Agri)

10:00 a.m. to 05:00 p.m.

Internationally linked Agri Commodities

10:00 a.m. to 09:00 p.m.

Non-Agri Commodities (Bullion, Metals, Crude)

10:00 a.m. to 11:30 p.m.

Yes. While taking delivery of the commodities is not compulsory, however if you wish to take the delivery of a certain commodity you need to inform us about the same in advance. There will be separate charges levied for delivery marked trades/transactions.

No, NRIs are not allowed to trade in commodities on Indian commodities exchanges at the moment. Even banks, mutual funds and FIIs cannot trade in commodities in India.

4. CURRENCY TRADING FAQS

Currency Derivatives are currently available for trading on four currency pairs viz.US Dollars (USD-INR), Great Britain Pound (GBP-INR), Euro (EUR-INR) and Japanese Yen (JPY-INR) in India.

The size of each contract for different currency pairs on the exchange are as follows:
Currency Pair Contract Size:

  • USD-INR USD 1000
  • EUR-INR EUR 1000
  • GBP-INR GBP 1000
  • JPY-INR JPY 100,000

All resident Indians as defined in section 2(v) of the Foreign Exchange Management Act, 1999 (FEMA, Act 42 of 1999) are eligible to trade in the currency derivatives segment. For participation by regulated entities, permission from respective regulators should be obtained. Arihant Capital offers trading facility in Currency Derivatives to all Resident Individuals / HUFs / eligible corporates fulfilling the FEMA criteria.

Existing customers do not need a separate trading account for currency derivatives. Just check with your Arihant advisor if the currency derivatives trading option is activated or not, in case you need help please write to us at contactus@arihantcapital.com.

If you are not an Arihant customer you will need to open a new trading account with Arihant. To open an account click here

Demat account is not required for currency trading in India.

Currency trading is offered by NSE, BSE and MCX-SX

Trading on currency derivatives is allowed during exchange permitted timings. Currently the trading hours for currency derivatives on all the exchanges are 9am-5pm from Monday to Friday.

All currency futures and options contracts on exchange are net settled in cash in Indian Rupee. The final settlement price is the RBI Reference rate for each currency pair published on the last trading day of the expiry month. 

All Currency contracts expire two working days prior to the last business day of the expiry month at 12 noon.

The exchange traded currency derivative market is regulated by SEBI through the recognized stock exchanges. The Foreign Exchange Management Act is the law, which regulates the Foreign Exchange market and the regulatory authority for the Indian Foreign Exchange Market is the Reserve Bank of India (RBI).

Yes, same margin can be used to trade in both equity and currency segment.

5. MUTUAL FUNDS FAQS

Q ) Does Arihant offer Mutual Fund Service?

A )

Arihant is an AMFI registered mutual fund distributor. Arihant offers investment in all the mutual fund schemes available in India, including schemes from top fund houses like HDFC Mutual Fund, Reliance Mutual Fund, SBI Mutual Fund, ICICI Prudential Mutual Fund. Click here to learn more about mutual funds.

Q ) Do I have to open an account with Arihant invest in mutual fund with you?

A )

You can invest in mutual fund with us without having a trading account through the conventional application mode wherein you have to fill in application form and provide a cheque. However if you open an account with us, you can invest seamlessly without the hassle of filling the aplication form.

Q ) Will you help me in choosing the right mutual fund scheme for investment?

A )

When you invest in mutual fund through Arihant, we not only help you filling and submitting your MF investment application, but we also help you in your investment decision. Choosing from a universe of over 1500+ schemes can be really daunting. But our team of mutual fund advisors will help you to pick the scheme that is right for you based on your profile and investment goal. So do not worry, just call our advisor or email us on: mutuafund@arihantcapital.com and our executive will get in touch with you.

To invest in mutual funds or know more about our mutual fund service, click here

Q ) How can I access my mutual fund portfolio with Arihant?

A )

At Arihant we want to make investing and managing your portfolio simpler and easier for you, therefore we send you a summary of your mutual fund portfolio every month on your registered email ID. We also provide access to your mutual fund account online for a nominal charge. To avail this service email us at mutualfund@arihantcapital.com.

Q ) How do I invest in mutual fund?

A )

Arihant offers invest in mutual fund service without the hassle of filling in lengthy application forms. You can invest in mutual funds through your trading account. In case you want to invest via the conventional mode, our executive will help you in acquiring, filling and submitting the application form.

Our advisors also help you select the best mutual fund scheme suited to your needs by understanding your profile and thereby recommending the best fund for you. If you need information on performance of different schemes, we will also provide guidance for that. For more information on Arihant’s mutual fund service click here.

Q ) How do I fill up the application form of a mutual fund scheme?

A )

You must mention clearly your name, address, email ID, mobile number, number of units applied for and such other information as required in the application form. You must give your bank account details so as to avoid any fraudulent encashment of any cheque/draft issued by the mutual fund at a later date for the purpose of dividend or repurchase. Any changes in the address, bank account details etc at a later date should be informed to the mutual fund immediately.

When you invest with Arihant, our executives will help you in all these procedures.

Q ) How can I invest in mutual funds using my trading account? How does it work?

A )

You just need to provide details of the mutual fund scheme and amount that you want to invest along with your client code to your Arihant advisor and dealer and they will purchase the same in your trading account. Just like in case of shares, the mutual fund units will be allotted to your demat account. Whenever you want to sell certain units of mutual funds, follow the same procedure and also provide the demat instruction slip or you should have provided a POA so that Arihant can provide the units to the exchange for settlement. The amount towards sale will automatically be credited to your trading account.

Q ) Can non-resident Indians (NRIs)/Foreign Portfolio Investors (FPIs) invest in mutual funds?

A )

Yes, NRIs and FPIs can also invest in mutual funds. Necessary details in this respect are given in the offer documents of the schemes.

Q ) What should I look for into an offer document?

A )

An abridged offer document, which contains very useful information, is required to be given to the prospective investor by the mutual fund. You should read the whole offer document very carefully. The application form for subscription to a scheme is an integral part of the offer document. SEBI has prescribed minimum disclosures in the offer document. Due care must be given to portions relating to main features of the scheme, risk factors, initial issue expenses and recurring expenses to be charged to the scheme, entry or exit loads, sponsor’s track record, educational qualification and work experience of key personnel including fund managers, performance of other schemes launched by the mutual fund in the past, pending litigations and penalties imposed.

Q ) How do I know where the mutual fund scheme has invested money mobilised from the investors?

A )

The mutual funds are required to disclose full portfolios of all of their schemes on half-yearly basis which are published in the newspapers. The portfolio details of mutual funds is available online on various websites and is updated on a monthly basis. You can visit our website and get the portfolio details of the mutual fund schemes under news and markets section.

Some mutual funds send the portfolios to their unitholders. The scheme portfolio shows investment made in each security i.e. equity, debentures, money market instruments, government securities, etc. and their quantity, market value and % to NAV. Some of the mutual funds send newsletters to the unitholders on a monthly / quarterly basis which also contain portfolios of the schemes. 

Q ) Which mutual fund is right for me?

A )

Every individual has different financial goals and different investor profile, so one scheme that may be suitable for your friend might not be suitable for you. You need to consult a financial advisor to find the right scheme for you. Arihant can help you in carefully selecting the right mutual fund scheme based on your profile and financial goals. A broad categorization based on investment objectives is explained in the table below:

 

Investment Objective

Investment horizon

Risk

Ideal Instruments

Short-term Investment

1 day - 6 months

Negligible

Liquid/ultra Short-term plans

Capital Appreciation

Over 5 years

High

Diversified Equity/ Balanced Funds

Capital Appreciation with market returns

Over 5 years

High

Index Funds

Diversification through gold

Flexible

Low-Moderate

Gold ETFs

Regular Income

Flexible

Low-Moderate

Income Funds or Monthly Income Plans

Tax Saving

Over 5 years

High

Tax Saving Equity Funds

 

Q ) What Is KYC?

A )

KYC is an acronym for 'Know your Client', a term commonly used for Client Identification Process prescribed by SEBI for financial intermediaries to 'know' their clients. With effect from January 1, 2012, Centralized KYC registration process through SEBI Registered KYC Registration Agencies (KRAs) has been implemented. With this each investor has to undergo KYC process only once in the securities market and the details would be shared with other intermediaries by the KRAs. 

 Investors who have an equity trading account do not need a separate KYC and can invest in mutual funds using their Arihant trading account.

Q ) Where and how can I to be KYC compliant? Do I have to repeat the KYC process with every mutual fund?

A )

The Association of Mutual Funds of India (AMFI) has facilitated a centralized platform through CDSL Ventures Limited ("CVL"), a wholly owned subsidiary of Central Depository Services (India) Limited, to carry out the KYC procedure on behalf of all mutual funds. CVL through its Points of Service (PoS) will accept KYC application forms, verify documents and provide the KYC acknowledgement (across the counter on a best effort basis). The list of PoS will be displayed on the websites of mutual funds, CDSL and AMFI. Once the KYC is duly completed in all regards, the investor needs to produce a copy of the acknowledgement when investing for the first time with a mutual fund. There is no need to repeat the KYC process individually for each mutual fund.

Q ) What documents are required for KYC compliance?

A )

Individual investors will have to produce his proof of identity (Photo PAN card copy or PAN card copy and copy of the passport, driving license etc) and proof of address (any valid documents listed in section B of the KYC Application form for Individuals). Non -Individual investors will have to produce certain documents pertaining to its constitution/registration to fulfill the KYC process. A list of mandatory certified documents to be submitted can be found in section C of the KYC application form for Non-Individual Investors. Applicants have to submit copies of all the documents duly self attested accompanied by originals for verification.

Q ) Will I have to visit POS personally to obtain KYC Compliance?

A )

No. The KYC Application Form along with the necessary documents (including originals if the copies are not attested) can be sent to your Arihant executive who will arrange to complete the KYC process and obtain the KYC acknowledgement through any of the PoS.

Q ) How can I transact in Mutual Fund after completing my KYC compliance requirement?

A )

Investors must attach their KYC Acknowledgement along with the Investment Application Form(s) / Transaction Slip(s) while investing for the first time in a mutual fund. Applications Forms / Transaction Slips not accompanied by KYC Acknowledgement are liable to be rejected by the Mutual Fund.

Q ) What is the process for NRIs residing outside India? How can I be KYC Compliant?

A )

The soft copy of KYC form can be downloaded from here. The same duly completed along with the attested copy of following can be submitted to your Arihant executive who will complete the KYC formalities for you: 

  • Proof of identity*
  • Proof of address*
  • Certified true copy of the passport
  • Certified true copy of the overseas address and permanent address

*Note: If any of the documents (including attestations/ certifications) towards proof of identity or address is in a foreign language, they have to be translated to English for submission. Further, in case original copies are not produced for verification, then copies of proof of identity and proof of address should be properly attested by authorized officials of overseas branches of Scheduled Commercial Banks registered in India, Local Banker, Notary Public, Court Magistrate, Judge, Indian Embassy /Consulate General in the country where the client resides.

Q ) Where do I look out for information on mutual funds?

A )

You can access details of mutual fund schemes, their portfolio and performances on our website. Additionally almost all the mutual funds companies have their own web sites where you can get the information about their and forthcoming funds. Mutual Fund companies also publish fact sheets of their funds every month from where you can get useful information of the current running schemes.

You can also access the NAVs, half-yearly results and portfolios of all mutual funds at the web site of Association of mutual funds in India (AMFI) www.amfiindia.com. AMFI has also published useful literature for the investors. You can also log on to the web site of SEBI i.e. www.sebi.gov.in and go to "Mutual Funds" section for information on SEBI regulations and guidelines, data on mutual funds, draft offer documents filed by mutual funds, addresses of mutual funds, etc. Investors may approach their agents and distributors to guide them in this regard.

Q ) If mutual fund scheme is wound up, what happens to money invested?

A )

In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unitholders are entitled to receive a report on winding up from the mutual funds which gives all necessary details.

Q ) Are mutual funds allowed to indulge in speculation / day trading?

A )

 No, mutual funds are not permitted to speculate. As per SEBI regulations, all trades done bymutual funds should be settled by delivery except derivative trades, which are settled in cash.

Q ) How can I redress my complaints?

A )

You would find the name of contact person, in the offer document of the mutual fund scheme, whom you may approach in case of any query, complaints or grievances. Trustees of a mutual fund monitor the activities of the mutual fund. The names of the directors of asset management company and trustees are also given in the offer documents.

You can also approach SEBI for redressal of your complaints. On receipt of complaints, SEBI takes up the matter with the concerned mutual fund and follows up with them till the matter is resolved.

 

6. DEPOSITORY FAQS

A depository is an entity that holds securities/shares of its account holder in electronic form through a registered Depository Participant (DP). It holds no physical certificates but communicates with companies, or their agents, by electronic means. It can be compared with a bank, which holds funds for its depositors. Following table explains the bank-depository analogy:

BANK

DEPOSITORY

Holds funds in an account

Hold securities in an account

Transfers funds between accounts on the instruction of the account holder

Transfers securities between accounts on the instruction of the account holder

Facilitates transfer without having to handle money

Facilitates transfer of ownership without having to handle securities

Facilitates safekeeping of money

Facilitates safekeeping of securities

Yes, Arihant is a depository participant with both the apex depositories of India, NSDL and CDSL, and offer all demat related services.

Dematerialisation (or Demat) is the process of conversion of a share certificate from its present physical form (share certificate) to electronic form.

Arihant offers the following depository services to investors:

  • Dematerialisation: conversion of physical certificates into electronic form.
  • Rematerialisation: conversion of securities in demat form into physical certificates.
  • Electronic settlement:of trades in stock exchanges.
  • Transfer of shares: transfer of shares from one DP account to other, using a delivery instruction slip.
  • Pledging/hypothecation: availing loan against electronic shares held by DP.
  • Electronic creditof securities allotted in public issues, rights issue.
  • Receipt of non-cash corporate benefits such as right/bonus, in electronic form.
  • Freezing of demat accounts, so that the debits from the account are not permitted.
  • Nominationfacility for demat accounts.
  • Services related to change of address.
  • Availing stock lending/borrowing

In addition, we also have an online depository facility wherein you can check all your DP account transactions and holdings online – anytime, anywhere. To access your account login to your Client Dashboard and select Online Demat on the left bar.

Opening an account with us is quick, simple and convenient. Fill the form and sign across all the required places. Once your form is submitted along with the required documents, your account will be opened.

Yes, you can open more than one demat account with Arihant Capital Markets Ltd. There is no restriction on the number of accounts you can open with the same Depository Participant (DP).

You can use your existing demat account. You will have to ensure that we receive clear funds in our accounts 2 days before pay-in to the Exchange. You will also have to ensure that funds for margins are also in our account before placing an order.

 No you do not require maintaining any minimum balance of securities in your demat account.

Arihant offers you a 24/7 online access to your DP account through your Client Dashboard, which you can access after logging in to your account. Click on Online Demat account on your dashboard to check your holdings online – anytime, anywhere. You need a username (your trading code) and password (8  digit alpha numeric) to access the same.

 

In addition, we also send you a monthly statement of holdings and a transaction statement of your demat account, which details out your current balances and various other transactions done in your account.

Any transaction for sale and purchase of securities through a broker on the stock exchange to be settled through Clearing Corporation / Clearing House is generally termed as On Market transaction. Off Market transaction is one which is settled directly between two BOs with or without using the broker and where no clearing corporation / clearing house is involved.

Pledging of shares enables you to obtain loans against your dematerialised shares. So you get liquidity without having to sell your shares. You can pledge your shares and you can either get the option to make further investments using your pledged securities or you may even get money against your pledged securities that can be utilised to finance your personal needs.

A highly simplified procedure may be availed of for pledging of securities in the electronic mode. The pledged securities continue to be reflected in your DP account but the concerned securities are "blocked" and you cannot use it for any transactions. As and when the pledge is to be removed, based on confirmations received from you and the pledgee (your DP), the blocked securities will be released to "Free Balance" of your account.

The pledgor continues to remain the beneficial owner of the pledged securities and will, therefore, receive all the corporate benefits during the period of pledge.

7. NRI FAQS

Q ) What securities can an NRI invest in?

A )

NRIs can invest in

  • Equities under PIS
  • Preference shares, Convertible Preferences shares and Convertible debentures of an Indian company
  • Derivatives
  • IPO Investment 
  • Mutual Funds (including ETFs)
  • Bonds issued by PSUs
  • Units of UTI, Central and State Government securities (other than bearer securities) and National Plan/ Savings Certificates

For further details please email us at nri@arihantcapital.com

Q ) Can NRI investor invest in Indian stocks?

A )

You can invest in Indian shares if you fall under any of the following categories:

  • Indian citizens and residents:Currently Indian capital markets are fully open for investments for residents of India - individuals and institutions.
  • Non-resident Indians (NRIs), persons of Indian Origin (PIOs): NRIs, PIOs and overseas corporate bodies controlled by NRIs/PIOs can also invest in Indian shares and debentures through stock exchanges under the Portfolio Investment Scheme (PIS).
  • Foreign Institutional Investors (FIIs):FIIs and their sub-accounts are allowed to invest in Indian equities and debt segment by registering themselves with a designated depository participant. Further, they are governed by SEBI (Foreign Portfolio Investors) Regulations, 2014 for investing in India.
  • Foreign citizens: If you are a foreign born individual investor whose parents or grandparents were never part of India, you can now invest in Indian markets under theForeign Portfolio Investor (FPI) category.

Q ) I am an NRI and now I am thinking to invest in Indian shares. How can I get started?

A )

Step-1: Open a bank account and get Portfolio Investment Scheme (PIS) Approval

The first step is to open one of the three bank accounts-non-resident external rupee (NRE) account, non-resident ordinary rupee (NRO) account or foreign currency non-resident account (FCNR)-with a designated bank branch.  You will also need approval under the Portfolio Investment Scheme (PIS) by the RBI, which allows you to invest in the Indian stock markets.  The PIS approval is given by the bank in which you have an NRE/NRO/FCNR account.  You can get in touch with our NRI desk to assist you in processing the PIS approval and the bank account. More on PIS is given under PIS head of NRI FAQs.

Step-2: Opening Trading and Demat Account

 You need to open the following accounts:

  • Trading Account: This is for placing buy/sell orders. You can open your account with Arihant. We are a SEBI registered stock broker with leading stock exchanges of India. At Arihant, we will offer you wide array of financial products with complete research support.
  • Demat Account: This will hold your stocks and securities. You can open your account with ARIHANT. We are a SEBI registered Depository Participant (DP) with NSDL (National Securities Depository Ltd.) and CDSL (Central Depository Services of India Ltd).

Step-3: Now make your investment or start trading online

  1. Place, view, modify or cancel your orders anytime you want.
    Once a trade is executed, transfer fund/securities from your bank account/depository account to our beneficiary account. We will settle your trades with clearing corporation on the settlement day and your accounts would be deposited with fund if you sold stocks or with the securities if bought.

Q ) How do you service your NRI client?

A )

As an NRI client, you have a dedicated Advisor who is your one point of contact. (S)He will provide you all the help and assistance you need to make investments, whether directly in equities or through our HNI services. We also offer a one-on-one video chat service to all our offshore clients so you can stay on top of your investments and get the advice you need no matter which part of the world you are in.

We have online trading facility and online access to all your statement and accounts, so that you can place your trades or check your account – anytime anywhere.

Q ) How can I research and keep track of my investments?

A )

Arihant provides you detailed research and latest market news and updates through its website www.arihantcapital.com to keep you on top of your investments. You also have access to your trading account online through Online Backoffice.

In order to maximize your returns, it is necessary to review your investment portfolio on a periodic basis. You may want to review your investments based on your changing goals, newer investment avenues, changing market dynamics, etc. It is also possible that some investments that you are holding may not meet your expectations. In all such cases, Arihant’s PCG service helps you in managing your portfolio.

Q ) What are the documents required for opening an account with Arihant?

A )

Being an NRI, you need to provide the following documents to open an account with us along with the client registration form:

  1. PAN CARD (compulsory)
  2. Address proof of India (bank passbook/ passport / driving license, electricity/telephone bill)
  3. Address proof of your foreign 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)
  4. Bank Proof: Bank Verification letter indicating type of account as NRI/NRE/NRO and Bank Statement
  5. Power of attorney as per format
  6. Portfolio Investment Scheme (PIS) permission from the respective designated bank
  7. Proof of depository accounts
  8. 2 Passport size photographs
  9. 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 the following: (a) Place of Birth as India in foreign passport (b) Copy of PIO / OCI Card as applicable in case of PIO/OCI

Q ) I already have a bank account in India. Can I do my transactions through this bank?

A )

You can have as many NRI/NRO accounts in India but you should have only one designated bank for sale/purchase of shares under the Direct/Portfolio Investment Schemes. RBI guidelines permit NRI investors to designate only one bank authorized by RBI to undertake purchase/sale of shares/debentures through the stock exchange. The client has to give a declaration that he has not obtained RBI permission for sale/purchase of shares under the Direct/Portfolio Investment Schemes through any other bank.

Q ) What is the distinction between NRE and NRO accounts?

A )

Funds remitted from abroad or local funds, which can otherwise be remitted abroad to the account holder, can be credited to NRE Accounts. Local funds, which do not qualify for remittance outside India, are required to be credited to NRO accounts.

Q ) Can I pay foreign currency into my account?

A )

It is not possible for us to accept foreign currency cheques. To start trading on NSE, BSE, MCX, NCDEX or MCX-SX, you will need to have a bank account in India.

You can open a NRI bank account and transfer funds from your overseas bank account to the Indian account and start investing through us.

Q ) What is PIS?

A )

Portfolio Investment Scheme (PIS) is a scheme of the Reserve Bank of India (RBI) defined in Schedule 3 of Foreign Exchange Management Act 2000 that enables NRIs and OCBs to purchase and sell shares and convertible debentures of Indian companies on a recognized stock exchange by routing all such purchase/sale transactions through their NRI Savings Account with a designated bank branch. For this purpose, the NRI/PIO has to apply to a designated branch of a bank, which deals in Portfolio Investment.

Q ) What are the formalities required for opening a PIS account?

A )

NRIs are required to open separate PIS account (NRE/NRO) for the purpose of investments in secondary market on repatriation & non-repatriation basis respectively apart from maintaining savings NRE/NRO account. To open an account, an undertaking letter, the bank account opening form with the following annexures should be submitted:

  • Application for PIS
  • Two photographs signed across
  • Copy of passport (first four pages and last page) and visa. These copies should be attested by the Bank Branch Manager (Overseas) / Notary Public / an official of the Indian Embassy in the country of residence
  • RPI form for repatriating the benefits or NPI form for non-repatriating the benefits

Q ) What is the procedure for making investments under the PIS scheme?

A )

  • Open a PIS account with a designated bank branch, which is approved by the Reserve Bank of India, for this purpose. It is also advisable to maintain a NRE/ NRO account with the same designated branch for administrative convenience.
  • Open demat account(s) with a Depository Participant (Arihant) to hold your shares. Separate Demat accounts have to be opened for maintaining repatriable and non-repatriable investments.
  • Open a trading account with Arihant through which you can execute purchase/sale transactions.

Q ) Can income earned on Portfolio Investment be remitted abroad?

A )

As an NRI, you can remit your income such as interest and dividend from your portfolio investments acquired whether on repatriation basis or on non- repatriation basis, provided you have paid applicable taxes. However capital gains can be repatriated only if investment is on repatriable basis.

8. FPI FAQS

The following category of investors is eligible to register as FPIs:

Category I – Government and Government related investors such as Central Banks, Governmental agencies, sovereign wealth funds, international/ multilateral organisations/ agencies.

Category II – This category shall include:

  • Appropriately regulated broad based funds such as mutual funds, investment trusts, insurance/ reinsurance companies,
  • Appropriately regulated persons such as banks, asset management companies, investment managers/ advisors, etc,
  • Broad based funds that are not appropriately regulated whose investment manager is appropriately regulated,
  • University funds and pension funds, and
  • University related endowments already registered with SEBI as FII/ sub-account.

The investment manager(s) of unregulated broad based funds should first register themselves as Category II FPI and must undertake that they shall be responsible and liable for all acts of commission and omission of all its underlying broad based funds and other deeds and things done by such broad based funds under these regulations.

Category III - All other FPIs not eligible under category I and II such as endowments, charitable societies/ trust, foundations, corporate bodies, trusts, individuals, family offices, etc.

No. FPIs would not require direct registration from SEBI and they would be henceforth subject to registration being granted by a designated depository participant (DDP) on behalf of SEBI.

The DDP may obtain a declaration from the applicant that it fulfils the eligibility criteria of category I FPI. Additionally, the DDP may verify the relevant details under which the entity has been established – e.g. Govt Charter, Act, Legislation, the shareholding pattern provided by the FPI applicant, etc. For existing FIIs/ SAs, the DDP may continue to use the categories such as Sovereign Wealth Fund, Foreign Government Agency, Foreign Central Bank, International / Multilateral organization / agency under which the investor is already registered with SEBI.

FPI registration charges are as under:

  • Category I FPIs are exempt from payment of registration fees.
  • A registration fee of USD 3,000 for Category II and USD 300 for Category III is payable by FPIs respectively for a block of three years.

Yes. In the foreign institutional investor (FII) regime, wherever an entity engages Multiple Investment Managers (MIM structure) it can obtain multiple registrations with SEBI. However these applicants are required to appoint the same local custodian. Further, investments made under such multiple registrations are clubbed for the purpose of investment limits. The same position shall continue in the FPI regime.

Yes. At the time of conversion as FPI, the erstwhile FII/SA shall make an application to DDP in Form A along with supporting documents as provided in the FPI Regulations. Conversion fee of USD 1000 shall be paid at the time of conversion.

Yes, all existing investments made by the FIIs/SAs/QFIs can be retained under the FPI regime. However, in respect of those securities, where FPIs are not allowed to invest (e.g. unlisted securities) no fresh purchase shall be allowed as FPI. They can only sell their existing investments in such securities.

FPIs are permitted to transact only in the following:

  1. Securities in the primary and secondary markets including shares, debentures and warrants of companies, listed or to be listed on a recognised stock exchange in India
  2. Units of schemes floated by domestic mutual funds, whether listed on a recognised stock exchange or not
  3. Units of schemes floated by a collective investment scheme
  4. Derivatives traded on a recognised stock exchange
  5. Treasury bills and dated government securities
  6. Commercial papers issued by an Indian company
  7. Rupee denominated credit enhanced bonds
  8. Security receipts issued by asset reconstruction companies
  9. Perpetual debt instruments and debt capital instruments, as specified by the RBI
  10. Listed and unlisted non-convertible debentures/ bonds issued by an Indian company in the infrastructure sector, where ‘infrastructure’ is defined in terms of the extant External Commercial Borrowings guidelines
  11. Non-convertible debentures or bonds issued by Non-Banking Financial Companies categorised as ‘Infrastructure Finance Companies’ by the RBI
  12. Rupee denominated bonds or units issued by infrastructure debt funds
  13. Indian depository receipts
  14. Such other instruments specified by SEBI from time to time.

Yes. Arihant has a dedicated team that deals with investors following under the FPI categories. With a team of highly qualified professionals and a dedicated Research team, Arihant Capital provides a client-centric approach to offer customized solutions to non-resident Indians, and foreign investors who want to be a part of India’s growth story. We offer the following services to our foreign investors:

  • Access to a dedicated team that specializes in FPI investment
  • Tie-up with designated depository participant to quickly get your account opened
  • Video call and voice call to ensure personalized one-on-one service to ensure you feel close to your relationship manager no matter which part of the world you are in
  • Expert team to help you plan your Indian portfolio based on your needs
  • Access to institutional level research to help you make the right investment decision
  • Round the clock support

For more information please write to us at contactus@arihantcapital.com.

9. ALGORITHMIC TRADING FAQS

Yes, algo trading has started in India and permitted by SEBI. However, individual investors are not allowed for to automate strategies. To start algo trading in India one needs to register as an Authorized Person on the exchanges. The one-time cost of registering is Rs 3000 per segment / exchange. So if someone wants to register for NSE – Equity, F&O, and Currency, that will be a one-time cost of Rs 9000 (Rs 3000 each).

As defined by National Stock Exchange (NSE), "Automated Trading shall mean and include any software or facility by the use of which, upon the fulfillment of certain specified parameters, without the necessity of manual entry of orders, buy/sell orders are automatically generated and pushed into the trading system of the Exchange for the purpose of matching. SEBI has allowed Exchanges to extend Algorithmic trading facility to members involving usage of various Decision Support Tools / algorithms / strategies."

9.1 ARIHANT WEBSITE FAQS

There is a QUICK LINKS orange button on the top right side in the main menu bar, which can be accessed from every page of the website. When you hover on that button a dropdown menu will open, which has a list of all important links you need including Online Trading (Ari-trade InvestEase), Online Backoffice, Fund Transfer, Online Mutual Fund and Open an account.

Once you login to Arihant's website using hte client login option you will be directed to your Client Dashboard. The dashboard gives you access to your online backoffice, demat account (using single-sign-on), full research section, important announcements and all important reports you need to trade and invest. 

9.2 FIXED INCOME FAQS

Q ) Who can invest in 54EC capital gains bonds?

A )

Any individual, Hindu Undivided Family (HUF), approved institution and non-resident Indian (NRI), can invest in these bonds provided certain conditions are met. The condition is that only long-term capital gains (LTCG) earned by selling a residential flat or independent house, which you held for at least three years, can be invested in this bond.

Q ) What is the interest rate in 54EC Bonds?

A )

The interest rates on these bonds changes every financial year, however currentyl you earn a coupon rate of 6% payable annually (FY2017). You will be paid the interest on the 30th of June every year.

Q ) Are 54EC Bonds safe to invest?

A )

Only REC and NHAI have been permitted to issue eligible 54EC bonds and both are public sector enterprise, making them safe investment avenue. In addition to this, the bonds come with a credit rating of CRISIL AAA Stable' by CRISIL and AAA by CARE and AAA (ind) by Fitch Ratings. 

Q ) Is there a lock-in period for the investment in 54EC bonds?

A )

Yes there is a lock-in period of 3 years on these bonds, and these bonds are non-transferable. This means that once you invest in these bonds you will have to hold the bond for three years from the date of allotment.

Q ) How much amount can I invest to get the tax exemption?

A )

You are required to make a minimum investment of Rs 10,000, while the maximum amount you are permitted to invest is Rs 50 lakh in a financial year. Since, the face value is Rs 10,000 per bond, you can buy maximum of up to 500 bonds in one financial year.

Q ) How can I invest in 54EC capital gains bonds?

A )

Arihant Capital is an authorised arranger of these bonds. To invest you can contact us directly and our advisor will get in touch with you, or you can make investment through your nearest Arihant Investment Center.

Q ) What fixed income investments does Arihant offer?

A )

At Arihant we believe that every investor should hold a well-diversified portfolio spanning across asset classes. Therefore we provide a range of investment options to suit all your investment needs. For investors looking for safer investment avenues we offer a range of investment options including government bonds (NHAI, REC, NABARD), corporate fixed deposits, NCDs and debt funds.

Q ) What is the minimum amount I can start with?

A )

You can start with as low as Rs 1,000 to start investing in fixed income securities. Discuss with an Arihant advisor what is your investent goal and how long do you want to invest for, and they will recommend the best fixed income investment option for you.