Green signal: CA Institute allows its members to trade equity derivatives

The central council of the CA Institute has given its approval for its members to trade in equity derivatives. However, ICAI members cannot trade commodity derivatives, said Nihar Jambusaria, president of the Institute of Chartered Accountants of India (ICAI). Activity area.

As for clients, a CA Institute member cannot trade both equity and commodity derivatives for them, he added. Jambusaria said the matter had been referred to the central council by the Institute’s Ethical Standards Board. The issue before the board was whether members could invest or trade equity derivatives on an exclusive basis.

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The reasoning of the ICAI

“At the recent board meeting that ended last Friday, we gave formal approval for members to trade equity derivatives for their own account. Our reasoning was that when equity trading is allowed for members, equity derivatives should also be allowed, but only for themselves and not on behalf of anyone, ”Jambusaria said.

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The President of ICAI noted that this issue of allowing members to trade equity derivatives had been raised from time to time before the Ethical Standards Committee. This council had, in the past, rejected approval of the same.

In practice, an accountant has always been authorized to invest or trade equity shares (and not their derivatives) on an exclusive basis. They cannot do this on behalf of clients, as this was not permitted when engaged in a CA practice.

The CA Institute has more than 3.15 lakh members and more than 90,000 firms specializing in the traditional areas of auditing, direct, indirect and international taxes, including GST, and in emerging areas such as insolvency, financial services and corporate restructuring.


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