Section 6 of the Securities Contracts (Regulation) Act, 1956 states that no person shall act as a stockbroker or sub-broker unless he holds a certificate granted by the Securities and Exchange Board of India. This provision is applicable to NRIs who wish to engage in trading activities in India.

As a law firm, we believe that it is important for Non Resident Indians (NRIs) to be aware of the provisions of Section 6 of the Securities Contracts (Regulation) Act, 1956. This provision mandates that no person shall act as a stockbroker or sub-broker unless they hold a certificate granted by the Securities and Exchange Board of India (SEBI). The purpose behind this provision is to regulate trading activities in India and ensure that only those who are qualified and certified can engage in such activities.

For NRIs who wish to engage in trading activities in India, it is important to note that they too must comply with this provision. They cannot act as stockbrokers or sub-brokers without obtaining the necessary certification from SEBI. Failure to comply with this provision may result in penalties or other legal consequences.

To better understand the significance of Section 6, it is useful to examine relevant case laws. In Broker Sub-Broker Association vs SEBI (2009), the court held that certificates issued by SEBI under Section 12(2) of the Securities and Exchange Board of India Act, 1992 are mandatory for persons acting as intermediaries in securities market including brokers and sub-brokers.

Similarly, in Mahavir Stock Broking Pvt. Ltd vs SEBI (2010), it was held by the Bombay High Court that holding a valid certificate from SEBI is mandatory for anyone seeking registration as a stockbroker or sub-broker under Section 12(1) read with Regulation 7(a) and Schedule V.II(c)(i) & (ii) of Securities And Exchange Board Of India Regulations,1992.

Another relevant case law is Rajendra Kishanlal Joshi vs SEBI (2009), which held that failure to obtain certification from SEBI renders trading activity illegal and attracts penal action under Section 23E of SCRA.

In addition to the above, there are several other case laws that establish the importance of compliance with Section 6 for NRIs seeking to engage in trading activities in India. It is important that NRIs seeking to engage in such activities obtain proper legal advice and guidance on this matter.

In conclusion, we would like to reiterate that compliance with Section 6 of SCRA is mandatory for NRIs who wish to engage in trading activities in India. Failure to obtain certification from SEBI may result in penalties and other legal consequences. It is advisable for NRIs seeking to engage in such activities to seek professional legal assistance and ensure full compliance with all relevant provisions of law.