After receiving several queries on the authorisation status of certain electronic trading platforms (ETPs), the Reserve Bank of India (RBI) has released an alert list of entities that are neither authorised to deal in forex under the Foreign Exchange Management Act, 1999 (FEMA), nor authorised to operate electronic trading platforms (ETP) for forex transactions.
The 'alert list' is not exhaustive, says the RBI, adding that it is based on what was known to the RBI till September 7, 2022.
The central bank's list of such unauthorised entities includes Alpari, AnyFX, Ava Trade, Binomo, eToro, Exness, Expert Option, FBS, FinFxPro, Forex.com, Forex4money, Foxorex, FTMO, FVP Trade, FXPrimus, FXStreet, FXCM, FxNice, FXTM, HotForex, ibell Markets, IC markets, iFOREX, IG Markets, IQ Option, NTS Forex Trading, OctaFX, Olymp Trade, TD Ameritrade, TP Global FX, Trade Sight FX, Urban Forex, XM and XTB.
Notably, London-based OctaFX, which the RBI says is not authorised to deal in forex, was also one of the official sponsors of the Delhi Capitals team in the Indian Premier League (IPL) this year, say media reports. Ads of many such platforms can also often be seen on popular social media platforms including YouTube.
Also, the RBI has clarified that an entity not appearing in the 'alert list' can't be assumed to be authorised by the RBI. The RBI says people can undertake forex transactions only with "authorised persons and for permitted purposes", in accordance with the FEMA rules.
It adds that forex transactions can be done online only on the RBI-authorised ETPs or on recognised stock exchanges i.e. the National Stock Exchange of India Ltd., BSE Ltd. and Metropolitan Stock Exchange of India Ltd.
The central bank has said people should not undertake forex transactions on unauthorised ETPs or remit or deposit money for such transactions. Those indulging in illegal forex transactions can render themselves liable for legal action under the FEMA.
The RBI in February this year had first noticed that such unauthorised ETPs were placing ads about offering forex trading facilities on social media platforms, search engines, Over The Top (OTT) platforms, and gaming apps. In some instances, says the RBI, such ETPs-engaging agents personally contact gullible people to undertake forex trading or investment schemes and entice them with promises of "exorbitant returns". Many people have lost money by trading with the authorised platforms, the RBI adds.
Meanwhile, the RBI's list of authorised ETPs includes FX-CLEAR, NDS-Call, NDS-OM, CROMS, TREPS, ASTROID, and FX-SWAP -- they are all operated by Clearcorp Dealing Systems (India) Ltd. Others are i-Stream (operated by ICAP IL Indian Pvt Ltd), TEX/SEP and 360TGTX (operated by Three Sixty Trading Networks (India) Pvt. Ltd), FXall and Matching (operated by Refinitiv India Transaction Services Pvt. Ltd.) and BTBS (operated by Bloomberg Tradebook Singapore Pte Ltd.).