Description

NSE discontinues mandatory CP code requirement for NRI clients in F&O trading, allowing existing NRI clients to exit CP mechanism by October 27, 2025.

Summary

NSE has discontinued the mandatory requirement for Non-Resident Indians (NRIs) to obtain Custodian Participant (CP) codes for trading in the Futures & Options segment. Existing NRI clients with CP codes can choose to exit this mechanism by October 27, 2025, while new NRI clients can directly trade without CP codes.

Key Points

  • Mandatory CP code requirement for NRI F&O trading discontinued with immediate effect
  • New NRI clients can initiate F&O trading without CP codes
  • Existing NRI clients have option to exit CP code mechanism
  • 90-day window provided for existing clients to request exit (until October 27, 2025)
  • Clearing members must facilitate exit requests through email communication
  • CP codes with open positions can only be deactivated after positions are closed

Regulatory Changes

  • Elimination of mandatory CP code assignment process for NRIs
  • Simplified operational framework for NRI participation in derivatives trading
  • Retained flexibility for NRIs who wish to continue with CP code mechanism

Compliance Requirements

  • Clearing members must provide exit option to existing NRI CP clients
  • Exit requests to be processed through email communication within 90 days
  • Deactivation requests for CP codes with no open positions to be submitted to Clearing Corporation
  • Members must implement operational changes to accommodate future exit requests from NRI clients

Important Dates

  • Immediate Effect: CP code requirement discontinued for new NRI clients
  • October 27, 2025: Deadline for existing NRI clients to request exit from CP mechanism (90 days from SEBI circular dated July 29, 2025)

Impact Assessment

Positive Impact:

  • Simplified onboarding process for NRI clients in F&O segment
  • Reduced operational burden on clearing members
  • Enhanced ease of doing business for NRI investors

Operational Changes Required:

  • Clearing members need to update systems and processes
  • Communication protocols with existing NRI clients
  • Modified deactivation procedures for CP codes

Impact Justification

Operational change affecting NRI participation in F&O trading with specific compliance timeline