Online trading is becoming more and more popular in India. Many new traders are exploring platforms like Olymp Trade to invest in forex, stocks, and other financial instruments. But a big question that often comes up is – Is Olymp Trade SEBI registered?
In this article, we’ll explain Olymp Trade’s regulatory status, whether it follows Indian laws, and what Indian traders need to know before opening an account.
What is Olymp Trade?
Olymp Trade is an international online trading platform that started in 2014. It is based in St. Vincent and the Grenadines. This platform allows users to trade in various financial products like forex, stocks, commodities, cryptocurrencies, and fixed-time trades (FTTs).
Is Olymp Trade SEBI Registered?
In India, SEBI (Securities and Exchange Board of India) is the main body that looks after the stock and trading markets. SEBI works under the Ministry of Finance and makes sure that trading in India is done in a safe and legal way.
For any platform to legally offer trading services to Indian users, it must be registered with SEBI. However, Olymp Trade is not registered with SEBI. It is regulated by the IFC, which is an international body that handles dispute resolution and makes sure brokers follow certain rules.
While the IFC is respected globally, it is not officially recognized by the Indian government. This means Olymp Trade operates in a kind of legal grey area in India. If any issue or dispute arises, Indian courts might not be able to help, which could be risky for Indian users.
Online trading and forex trading are not banned in India, but they are strictly regulated by SEBI and the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA), 1999.
Also Read – Why is Olymp Trade banned in India?
What Is the Role of FIU-IND in Regulating Trading Platforms?
The Financial Intelligence Unit-India, or FIU-IND, works under the Ministry of Finance. Its main job is to keep an eye on financial transactions and make sure people are not using money for illegal activities like money laundering or funding terrorism. This is done under a law called the Prevention of Money Laundering Act (PMLA), which came into effect in 2002. While SEBI looks after India’s stock markets and trading activities related to shares and securities, FIU-IND mainly keeps an eye on financial platforms to make sure they are not being used for money laundering or funding illegal activities like terrorism.
FIU-IND’s oversight is primarily anti-money laundering (AML) and counter-terrorism financing (CFT) compliance.
FIU-IND asks these platforms to register as something called “reporting entities.” This means they must follow strict rules like verifying the identity of users (KYC – Know Your Customer), reporting financial transactions regularly, and keeping an eye on any suspicious activity. By doing this, FIU-IND makes sure that the money used on these platforms is not being misused.
By the end of December 2023, 28 crypto platforms such as CoinDCX, WazirX, Mudrex, and Binance had already registered with FIU-IND as reporting entities. These platforms are now required to follow the rules under the PMLA guidelines. They need to have strong KYC processes, send regular updates about user transactions, and take extra precautions if they see anything unusual or risky happening on their platforms.
However, it’s important to note that FIU-IND’s focus so far has mostly been on crypto exchanges. There’s no proof that forex trading platforms like Olymp Trade have been approved or registered with FIU-IND. Even though FIU-IND could technically keep a check on foreign trading platforms that deal with Indian users, there hasn’t been any clear action or approval for platforms like Olymp Trade.
So, while FIU-IND plays an important role in regulating digital financial activity in India, especially in the crypto space, it has not officially approved or monitored forex trading platforms like Olymp Trade as of now.
SEBI v/s FIU-IND
SEBI, or the Securities and Exchange Board of India, is the main authority that looks after the stock market and related trading activities in India. It ensures that everything happens in a fair and transparent manner. SEBI regulates forex trading but only on recognized Indian exchanges and only in currency pairs that include the Indian Rupee. It also makes sure brokers follow proper rules like keeping customer funds in separate accounts and sticking to safe trading practices. Well-known platforms such as Zerodha, 5Paisa, and Upstox are all registered with SEBI and follow these guidelines.
On the other hand, FIU-IND, which stands for the Financial Intelligence Unit-India, works more in the background to monitor how money flows through different platforms. Its main job is to fight against money laundering and the use of money for illegal activities. FIU-IND focuses mostly on crypto exchanges and foreign platforms that handle large transactions or deal in virtual digital assets. Platforms like CoinDCX and Binance have registered with FIU-IND as required under the rules, but forex trading platforms like Olymp Trade have not received any such approval from FIU-IND.
The key difference is that SEBI is a market regulator that controls how trading should happen in India, while FIU-IND is more like a watchdog that monitors the flow of money and checks for illegal financial activities. FIU-IND does not directly regulate trading platforms like SEBI does, but it ensures that any platform dealing with money follows rules related to anti-money laundering and the prevention of terrorist financing.
Olymp Trade’s Regulation and Safety
Even though Olymp Trade is not registered with SEBI, it is regulated by IFC and VFSC, which gives it some international recognition. The IFC even provides a compensation fund of up to €20,000 per trader if there’s any dispute or fraud.
Olymp Trade has won awards for good customer service and has strong online security. It supports different payment methods like bank cards, e-wallets, and even cryptocurrencies. You can also try their demo account with $10,000 virtual money to practice trading.
But still, since it is not SEBI-registered, Indian traders will not get the same level of safety and protection as they would from Indian brokers like Zerodha, 5Paisa, or Motilal Oswal. These SEBI-registered brokers keep clients’ funds in separate accounts, go through audits, and are much more transparent.
How to Trade Legally in India
If you are interested in online trading and want to stay safe and legal, follow these steps:
- Choose a SEBI-Registered Broker: Use trusted platforms like Zerodha, 5Paisa, or Fyers that follow Indian rules.
- Trade INR-Based Currency Pairs: Stick to pairs like USD/INR, EUR/INR, etc., and trade only on approved Indian exchanges.
- Check Authorization: Visit the official RBI and SEBI websites (www.rbi.org.in or www.sebi.gov.in) to confirm if the broker is legal.
- Educate Yourself: Learn about the market, trends, and risks through the free materials given by SEBI-registered brokers.
- Avoid Unregulated Platforms: Stay away from platforms listed on the RBI’s Alert List to avoid legal and financial troubles.
Conclusion
Olymp Trade is not SEBI-registered and operates in a legal grey area. While it’s not officially banned, its name on the RBI’s Alert List and its offerings of non-INR currency pairs raise serious concerns.
Indian traders should think carefully about the risks of using an unregulated platform. Even though it looks attractive because of low costs and easy-to-use features, the lack of legal protection can be dangerous.
For safer and legal trading, it’s always better to go with SEBI-registered brokers. They follow Indian laws, offer better protection, and are more reliable in case of any issues.
Before using Olymp Trade or any trading platform, make sure to do proper research. If needed, talk to a financial advisor. Always trade responsibly to protect your money and avoid any legal problems.
The information provided in this article is for informational purposes only and does not constitute financial, investment, or legal advice. While efforts have been made to ensure the accuracy of the information, it may not be exhaustive, and regulatory frameworks or platform statuses may change. This article is not an inducement, recommendation, or endorsement to engage in trading or investment activities with Olymp Trade or any other platform. Readers are strongly advised to consult a qualified financial advisor and legal advisor before making any financial or investment decisions. The author and publisher are not responsible for any losses or damages arising from actions taken based on this article.