Chandana.
Gone are the days of traditional modes of investing. With the improvement of technology, one can invest in anything, at any time.
Some of the laws which govern the online investments are:
Foreign Direct Investments (FDI)
Mutual Funds
FOREIGN DIRECT INVESTMENTS (FDI)
Foreign Direct Investments are made by non-resident entities.
Such an investment of more than 10% of the capital to the Indian Companies can be said to be called as Foreign Direct Investments.
FDI can be done through two routes
Government route - requires government approval.
Automatic route - do not require government approval
In the following sectors FDI is prohibited (the list is not exhaustive)
The Lottery business which includes government, private and online lotteries.
Gambling and betting.
Chit funds.
Nidhi company.
Trading in Transferable Development Rights.
Investors can invest in an online platform called Foreign Investment Facilitation Portal (FIFP).
GOVERNING LAW
Foreign Direct Investment Policy.
RBI guidelines.
Foreign Exchange Management Act, 1999
The main aim of this act is to facilitate the external trade payments and for promoting the orderly development.
Foreign Contribution (Regulation) Act, 2010,
Foreign Contribution (Regulation) Rules, 2011
MUTUAL FUNDS
A Mutual fund is the investment channel where the clients combinedly come forward to pool their resources to purchase stock, bonds, and other securities for their earnings.
These combined resources are invested by the Asset Management Company into securities.
GOVERNING LAW
SEBI (Mutual fund) Regulations, 1996.
The primary objective of this regulation is to improve the working and regulating mutual fund industry.
SEBI (Listing obligation and disclosure requirement) Regulations, 2015 (Amended on February 2017)
This regulation applies to the Asset Management Company who manages the mutual fund schemes whose units are listed on the recognised stock exchange.
RBI (Guidelines)
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