RBI Adds Seven Unauthorised Forex Platforms to Alert List

Source: FE

Context:

• The Reserve Bank of India (RBI) maintains an ‘Alert List’ of unauthorised forex trading platforms to warn the public against potential fraud.
• Entities on the list are not authorised under the Foreign Exchange Management Act (FEMA), 1999, nor permitted to operate Electronic Trading Platforms (ETPs) for forex transactions.

Recent Additions

RBI has added seven new entities/platforms:

1. Starnet FX
2. CapPlace
3. Mirrox
4. Trive
5. NXG Markets
6. Nord FX

With this addition, the total number of unauthorised forex entities on RBI’s alert list has risen to 95.

Forex Trading Platforms

Forex (Foreign Exchange) trading platforms are software applications that allow individuals and institutional investors to buy, sell, and manage currencies in the global foreign exchange market.

Purpose:

• Enable trading of currency pairs (e.g., USD/INR, EUR/USD).
• Provide real-time pricing, charts, technical analysis tools, and risk management features.

Electronic Trading Platforms (ETPs)

• Definition: Electronic Trading Platforms (ETPs) are digital systems that allow investors, traders, and institutions to buy, sell, or exchange financial instruments electronically, without the need for physical trading floors.
• Use Cases: Forex, equities, commodities, derivatives, and government securities.
• Key Feature: Real-time trade execution, price discovery, and settlement through secure electronic systems.

Foreign Exchange Management Act (FEMA), 1999

• Full Name: Foreign Exchange Management Act, 1999
• Enacted: 1999, replacing the Foreign Exchange Regulation Act (FERA), 1973
• Purpose: Facilitate external trade and payments and promote orderly development and regulation of the foreign exchange market in India.
• Regulator: Reserve Bank of India (RBI), with oversight from the Central Government.