CA trading in derivatives

are chartered accountants holding COP allowed to trading in derivatives like f&o?
Replies (8)
Quick Summary
Chartered Accountants (CAs) holding a Certificate of Practice (COP) are permitted to engage in derivative transactions, such as futures and options (F&O), in their individual capacity. These activities are not considered business activities and thus not prohibited for CAs in practice. However, trading in commodity derivatives is not allowed, nor is providing advisory services to clients in F&O. While F&O trading is treated as investment income and not business income for reporting purposes, losses and turnover from F&O trading should be reflected in financial statements. It's important to distinguish that F&O trading is generally non-speculative, while intraday F&O trading is considered speculative.

Yes, 

CA in practice allowed to do Derivative transactions if done in individual capacity.

You will be happy to note that the ESB and Council has passed an Item that:

Derivative transactions are not business activity and would therefore not be deemed as prohibited from the standpoint of members in practice undertaking the said activity in their individual capacity (and not in a professional capacity).

However trading in commodity derivative is not permissible.

@ Sri Snigdha ,

You can't do advisory services in F & O to clients.

But you can do trading in F & O on your own..No restriction
Thank you soo much for the replies. but while filing the MEF, should the derivative trade turnover should be shown apart from the professional income as the part of P&L?

No. It is being treated as investment in individual capacity and not business income, 

Lets say the amount invested was 20lac with that the f&o intraday trading turnover was around 1cr during the year and a loss of 2lacs including brokerage of 50k. so this should be reflected in balance sheet? But the trading in f&o is a non speculative business income?

1. Yes, the loss will get reflected in financial statements.

2. F&O trading is non-speculative business..  while intraday trading is speculative business.. & our topic is on F&O transactions i.e. NON speculative business....

Hello sir, can you please guide on intraday F&O transactions? If the intraday F&O transactions should be shown as the part of p&l, then the turnover would be professional gross income and intraday f&o turnover?
F & O trading is considered as normal business income..

Turnover is net amounts

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