Incorporation with share trading activity

[NITTE ASTHANA]

Dear members,

One of my client wants to incorporate a private company with the object of share trading through brokers..

Do we need to acquire approval from any of the department in this respect.

kindly guide.

Thanks and Regards

CS Nitte Asthana 

[CS Sanket Londhe]

No

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Thanks & Regards

CS Sanket Londhe

M.Com, Company Secretary

Mob: 8793443344

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[CS V Kartik]

Yes from SEBI. Also attach a declaration under Rule 8 at the time of name application.

Kartik

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[NITTE ASTHANA]

How we can apply to SEBI for approval and can anybody provide me the draft of declaration under rule 8

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Thanks & Regards

CS.Nitte Asthana

Niti A & Co.

Company Secretaries

Meerut (UP)

Mob. no - +91 8755146243

[CA SUJEET KUMAR]

For share trading for own income through brokers, No RBI approval required.

For share trading for clients through brokers(Sub-broker), RBI approval is required.

For being a broker, RBI approval is required.

Regards,

C.A. Sujeet kumar

M/s KUMAR & SHARMA
M- 9716622294, 7011095596

O-8595012719

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[NITTE ASTHANA]

If the object is to trade in equity,commodities,forex etc for self and to educate new traders as well....Do in this case also we need to acquire SEBI approval?

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[B R Gupta & Co.]

Dear Folk,

1. If your client is taking the sub-brokership from the Broker, then there is no need for the approval from the SEBI.

2. If your client is incorporating a Company for Education purpose,  then there is no need for the approval from the SEBI.

Thanks & Warm Regards

Rahul Gupta

CS, LL.B & B.Com

B R Gupta & Co.

Company Secretaries & Consultant

Cont. No.: +91 - 816 919 2320

 

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[anand a]

How they can prove that fund comes only from Directors. 

It should not be routed from public. 

So basically saying if it is from owned funds, no requirement of NBFC registration

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[Kumaran Ca]

Investing in shares and securities, derivatives etc and function of NBFC are all together different. First one should find out whether the company is a NBFC company or not.

For a company to be considered as NBFC, it has to pass the 50–50 test.

This means that

Financial assets should constitute more than 50 per cent of the total assets and

Income from financial assets constitute more than 50 per cent of the gross income.

If the company falls under this test then it will be considered as an NBFC and it has to get itself registered with RBI. Till it is registered, it cannot do trading of stocks and derivatives.

However, a company can invest its surplus funds in stocks, derivatives etc for which it need not to be registered as NBFC.

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