Muhurat Trading Eligibility: Who Can Participate?

Muhurat trading is a special trading session held during Diwali. It allows eligible investors and traders to take part in the market during a designated time window. Participation is not limited to resident individuals. NRIs, HUFs, and certain non-individual entities can also participate, provided they meet the applicable account, verification, and trading requirements.

Who Can Participate in Muhurat Trading?

Any retail or institutional investor, or trader with an active Demat and trading account, can participate. NRIs are also eligible, subject to applicable account and trading rules.

• Resident Individual Investors
  Indian residents aged 18 or above can participate if they have an active trading account and a linked Demat account. They also need to complete the required KYC checks and meet the account provider’s verification requirements.
  An individual can participate in eligible market segments once the account provider activates those segments. The investor also needs sufficient funds or approved margin for the intended transaction.
• Non-Resident Indians (NRIs)
  NRIs can participate, but their eligibility depends on their account arrangement and the rules for non-resident investments. They must trade via Non-Resident External (NRE) or Non-Resident Ordinary (NRO) bank accounts linked to an appropriate trading and Demat account.

The permitted transactions can differ by account type:

1. NRE Accounts
   These generally support eligible investments on a repatriation basis, subject to applicable conditions.
2. NRO Accounts
   These generally support eligible investments on a non-repatriation basis.
3. Trading Restrictions
   Certain account arrangements restrict intraday trading, derivatives, or other transaction types.

NRIs should also consider investment limits and country-specific restrictions. If your tax residency changed recently, you must reclassify the account before executing trades. The account provider can confirm which transactions the account permits during the special session. 

• Hindu Undivided Families (HUFs)
  A Hindu Undivided Family can participate through a trading and Demat account opened in the HUF’s name. The HUF operates as a separate account holder for investment purposes.
  The Karta holds exclusive operational authority to execute trades. Coparceners or family members cannot use this account for personal trades. The account generally requires:

1. The HUF’s PAN.
2. The Karta’s PAN and identity details.
3. The HUF’s bank account.
4. Documents that establish the HUF and the Karta’s authority.

Individual family members cannot use the HUF account as their personal trading account. Transactions must follow the account’s ownership and authorisation requirements. 

• Companies, Partnerships, and Other Entities
  Eligible non-individual entities can also participate through accounts opened in their legal names. This category may include companies, limited liability partnerships, partnership firms, and trusts, subject to the applicable account-opening rules.
  Their eligibility depends on the entity’s legal structure and completed verification. The account provider may request documents such as:

1. The entity’s PAN and registration details.
2. Proof of its registered address.
3. Constitutional documents, such as a partnership deed or incorporation documents.
4. Details of authorised signatories and relevant resolutions.
5. Bank account details in the entity’s name.

An authorised person can operate the account within the powers granted by the entity. The entity cannot use an individual’s personal account as a substitute for its own account.

Institutional investors can also participate through their approved market accounts, subject to the rules that apply to their category.

• Minors and Guardian-Operated Accounts
  A minor can hold a Demat account through a parent or legal guardian. However, this does not give the minor the same trading rights as an adult account holder.
  A minor cannot independently enter into regular trading transactions. A trading account in a minor’s name has limited use, mainly to sell eligible securities that the minor already owns through inheritance, gifts, corporate actions, or other permitted transfers. The guardian operates the account until the minor reaches adulthood.

Account Requirements That Apply Across Categories

Although each category has different conditions, some basic requirements apply to most participants. Before Muhurat trading, check that:

• The trading and Demat accounts remain active.
• KYC and account verification are complete.
• The linked bank account details are valid.
• The account has sufficient funds or eligible margin for the intended transaction.
• The account provider has enabled the relevant trading segment.
• No account freeze, restriction, or compliance issue prevents trading.

An active account does not guarantee access to every market segment. The special session may have separate timings or restrictions for different products. Check the applicable session notice and confirm the facilities available for the account category.

Conclusion

Resident individuals, NRIs, HUFs, and eligible entities can participate in Muhurat trading, subject to their account category and applicable rules. Minors face separate restrictions. Checking account status, authorisation, and permitted transactions helps clarify eligibility before the session.

Checking whether you can participate in Muhurat trading this Diwali? Visit HDFC SKY MoneyFest for expert stock recommendations and review account eligibility separately before proceeding.