Forex trade is one of the investment concepts that have gained popularity in India. With promising returns, many brokers took advantage. But because of rampant malpractice by forex brokers, the Indian authorities were forced to put strict regulations on how citizens could trade in forex markets.
Since its inception in 1992, India’s Securities and Exchange Board (SEBI) has served as a government regulator that supervises all financial affairs in the securities market. It is, therefore, the predominant regulator for forex activities in India. It supervises the operations of brokers, firms, and individual investors.
The board guarantees that these securities markets work with integrity and honesty. SEBI-regulated brokers get audited for any financial discrepancies. These audits have resulted in several brokers, firms, and investors paying heavy fines and license cancellations because of failing to adhere to SEBI rules.
Who Are Forex Brokers?
A forex broker is an investment firm that accords buyers and sellers with an option to use its platform to sell and buy foreign currencies. Also known as retail brokers, forex brokers transact on your behalf. The advantage of having a broker includes getting 24- hour market access and the ability to guess on the currency pair all over the world.
Most brokers offer clients the option to trade in different currencies, including those of developing countries. Using a forex broker, a buyer starts a trade by purchasing a currency pair and ends the transaction by selling the same currency pair.
How does SEBI Safeguard Indian Traders?
SEBI’s primary responsibility is to protect traders from unfair trade practices in three ways:
- Development Purposes
The board advocates for investors’ education and makes it mandatory for brokers to provide fundamental training for you as a beginner. The board trains middlemen such as brokers of the stock and securities market.
- Regulatory Duties
SEBI regulates all undertakings in the stock exchange and the securities market.
It does registration and controls all the operations of intermediaries, alternate brokers, portfolio managers alongside bankers. SEBI controls all the operations of depositories, securities custodians, as well as foreign institutional stakeholders.
The regulatory authority also controls venture capital investments, shares, stock gaining, and change of ownership in companies.
- Protective Functions
The board does not permit any form of insider trading. They also safeguard investors from unlawful and unethical trade practices from a broker. They restrict price rigging as brokers usually use this to cheat investors
Attributes of the Best Forex Brokers
- Registered, regulated, and approved by a reputable financial regulator like SEBI or RBI to prove their trustworthiness.
- Accept affordable minimum deposit.
- Can trade in different currency assets options like crypto, commodities, and global stock.
- Leverage available. These margins help you trade a larger volume on a small fraction of your money.
- Trading platforms that enable automated dealings.
- Negative balance protection. Due to adverse political and economic events, forex trade is highly leveraged. The sudden effects can result in losses more than your capital/deposits. To safeguard you from any possible losses, intermediaries cater for negative balance protection.
Sebi Registered Forex Brokers
Below is a list of the top SEBI authorized forex brokers in India that you can trust.
- XM Group
As a global FX broker, XM offers options to buy and sell forex, stock alongside crypto. They provide a demo account. A few features of XM include a minimum deposit of $5, a deposit with e-wallets and bank cards, and responsive customer support in many languages.
- AvaTrade
Ava Trade has over 1250 instruments on trading forex, stocks alongside crypto. The platform offers online trading information in 14 languages, and you only need to deposit $100 to get started.
- Forex.com
Forex.com is a top broker that provides both forex and metal trading. Additionally, they provide commodity and crypto trading services—some features of forex.com include a demo account, no deposit or withdrawal fees. An initial deposit of $50 is required.
- Hot Forex
Hot forex is among the best FX and commodities brokers. They serve both retail and organization clients. With Hot Forex, you can buy and sell up to 49 currency pairs and Cryptocurrencies. They offer you six account types, varying from Micro to Premium as well as Fixed accounts. More features include:
- A low minimum deposit of $50.
- Demo account.
- The middlemen support MT4 and MT5.
- IG Market
It is one of the oldest brokers and is registered on the London Stock Exchange. They allow you to buy and sell forex, stock, and bitcoin. Features include deposits via e-wallets and bank cards, a web trading platform, and no minimum deposit is needed.
- Alpari
With over 2 million traders, you can trade stock, metal assets, forex, and cryptocurrency. A trader can top up using bank cards.
- FP Markets
You can buy and sell forex, commodities, shares, multilingual customer support, and access global markets always.
- Instaforex
With more than 300 FX instruments, InstaForex facilitates leverage. Customer support is available 24 hours. Beginners can train first before opening an account at zero fees.
- Interactive Brokers
The company is well known as IBKR, and it offers clients the opportunity to invest, earn, borrow, or spend. They support mutual funds as a way of diversifying their portfolio. With this account, you can track your withdrawals at any time.
Bottomline
SEBI is one of the most prominent regulatory bodies in the world. It is tailored to make investing operations safe and secure for traders. It does frequent audits of brokers to weed out any financial malpractices.
To ensure your investment is secure, always confirm that the broker you are trading with is SEBI approved. This will give you a chance to lodge a complaint with SEBI in case of any disagreements. Remember to use global Forex brokers controlled by countries with solid regulatory institutions to ensure that your trading affairs are secure and safe.
