You will need to get NBFC license from RBI
It is a good idea of trading without any investment. It needs lots of practice and knowledge because you’re taking responsibility for people’s assets. It can be done on a vast level by establishing a non banking financial company.
I would advise you to trade with your own money. If you want to grow big, avoid loans. You can take from family and set up partnership from them but highly recommended to not borrow from friends or anyone else.
The regulations say, you can collect fees and profit sharing isn’t a fee. But in any case, here’s an informal guidance that makes this explicit.
Will there be any legal problem if I set up a private limited company with shareholders and directors from within family and using our own family fund(not taking any money from outsider). The sole purpose being derivative trading. The company would be just for efficient expense and tax management.
As I have mentioned in the post, you will be forced to get yourself an NBFC license.
Trading with other people’s money has become a popular option for many traders over the years. It is a way of trading without risking your own capital. If you have skills and you are good at making returns, it may benefit both you and the lender or you may end up piling up with debt. So choose carefully.
Use your own income to trade or borrow it from friends. This is the only way or else you might go into debt.
Forex is significantly risky so I would like to trade with my own money.
Using others’ money for trading is never a good idea even if you have a good experience in the field. But, if you have made up your mind, then you should use risk management strategies to ensure that you don’t lose big.
How will this work in the context of copy trading software such as 1cliq or many others? These allow one person to copy trades in multiple accounts. Would be interesting to hear from Nitin Kamath on this issue.