Regulatory overview · Not legal advice

Publishing Verified Trader Performance — India Regulatory Overview

How NakedPnL is positioned in India relative to SEBI's Investment Advisers and Research Analyst regulations, FEMA, the Income Tax Act §115BBH, and the DPDP Act 2023.

By NakedPnL Research·May 7, 2026·11 min read

TL;DR

NakedPnL is not registered with SEBI as an Investment Adviser under SEBI (Investment Advisers) Regulations, 2013, nor as a Research Analyst under SEBI (Research Analysts) Regulations, 2014.
The platform is not a Stock Broker, Sub-Broker, or Portfolio Manager and does not handle client funds or securities.
Crypto-asset (VDA) gains in India are taxed at a flat 30% under §115BBH of the Income Tax Act 1961, with a 1% TDS under §194S; the platform does not deduct TDS or generate Form 26AS entries.
Use of foreign exchanges by Indian residents may have implications under the Foreign Exchange Management Act 1999 (FEMA) and the LRS — users should consult a qualified adviser.
Personal data of Indian users is processed in line with the Digital Personal Data Protection Act 2023 (DPDP Act), once its rules are notified by MeitY.

NakedPnL operates a public registry of verified investment performance produced by individual traders who voluntarily connect read-only exchange API keys or sign on-chain wallet attestations. Daily NAV snapshots feed a time-weighted return (TWR) calculation; results are recorded in an append-only, SHA-256 chained ledger and Merkle-anchored to Bitcoin via OpenTimestamps so any third party can independently re-verify them.

This page describes how that activity is positioned under Indian law, with reference to the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), the Central Board of Direct Taxes (CBDT), and the Ministry of Electronics and Information Technology (MeitY).

How NakedPnL is classified in India

NakedPnL's activity is the production and distribution of factual performance data. The platform does not hold any SEBI registration, does not appear on the SEBI list of registered intermediaries, and does not undertake any activity that requires registration as an intermediary under §12 of the SEBI Act 1992.

SEBI (Investment Advisers) Regulations, 2013

Regulation 2(1)(l) of the SEBI (Investment Advisers) Regulations, 2013 defines investment advice as advice relating to investing in, purchasing, selling or otherwise dealing in securities or investment products, and advice on investment portfolio containing securities or investment products. Regulation 3 prohibits any person from acting as an Investment Adviser without registration, subject to exemptions in Regulation 4.

NakedPnL does not provide advice to any specific client. The same registry data is shown to every reader of a given page; the platform does not collect risk-profiling information, does not run a client-suitability assessment, and does not produce client-specific outputs. On those facts, the platform's posture is that its content is general information and outside the IA Regulations perimeter.

SEBI (Research Analysts) Regulations, 2014

Regulation 2(1)(u) defines a research report as written or electronic communication that includes research analysis, recommendations or opinion concerning securities or public offers and provides a basis for an investment decision. Regulation 2(1)(w) defines a research analyst as a person engaged in preparing or publishing research reports.

NakedPnL does not produce research reports. The platform publishes historical, factual performance series — the time-weighted return of a connected account computed from raw NAV snapshots — without commentary, target prices, recommendations, or opinions. The output is descriptive of past activity rather than predictive of future prices. On that basis, the platform's analysis is that the activity is outside the RA Regulations.

FEMA and the Liberalised Remittance Scheme

The Foreign Exchange Management Act 1999 (FEMA), administered by the Reserve Bank of India, regulates outbound remittances by Indian residents. The Liberalised Remittance Scheme (LRS) permits resident individuals to remit up to USD 250,000 per financial year for permissible current and capital account transactions, subject to applicable Tax Collected at Source (TCS) under §206C of the Income Tax Act.

Some Indian users connect accounts on offshore exchanges (Binance, Bybit, OKX, IBKR) to NakedPnL. The legality and tax treatment of holding balances on such venues is fact-specific and depends on the user's residency status, the nature of the asset, and the route of remittance. The platform does not facilitate or fund such accounts; it merely reads NAV. Users should consult a Chartered Accountant or FEMA counsel before using foreign venues.

VDA tax regime: §115BBH and §194S

Section 115BBH of the Income Tax Act 1961 (introduced by the Finance Act 2022) imposes a flat 30% tax on income from the transfer of Virtual Digital Assets (VDAs), without allowance for any deduction other than the cost of acquisition. Set-off of losses against other heads of income is not permitted; loss from VDA transfer cannot be carried forward.

Section 194S of the same Act requires a 1% Tax Deducted at Source (TDS) on payment of consideration for the transfer of a VDA, subject to thresholds. CBDT circulars (Circular No. 13/2022 and Circular No. 14/2022) elaborate the operational mechanics, including the application of TDS to peer-to-peer and exchange-mediated transfers.

NakedPnL does not deduct TDS, does not file any TDS return, and does not generate entries on Form 26AS or the Annual Information Statement. The exchange or wallet that processed each transaction is the relevant party for §194S compliance. Users remain responsible for their own §115BBH reporting in their income tax return.

What NakedPnL does not do

No copy trading. The platform cannot replicate a trader's positions into another user's account.
No personalised recommendations. The platform does not collect risk-profiling data and does not provide tailored advice.
No broker-affiliate links to SEBI-registered or unregistered brokers in exchange for fees.
No investor-trader matching. The platform does not arrange transactions between investors and traders.
No custody. Read-only API keys cannot move funds; wallet attestations do not grant transfer authority.
No execution. The platform never sends orders to any venue.

These design choices are encoded as feature flags in the codebase and protected by a continuous-integration test that fails the build if any flag is changed.

What Indian users should know

Indian users should treat the registry as factual performance data and nothing more. Past performance is no indicator of future performance — the standard SEBI disclosure on past-performance data — and is supplemented on the platform by a clear disclaimer on every trader profile.

If a third party offers to manage your money based on a NakedPnL track record, verify whether that third party is SEBI-registered as an Investment Adviser, Portfolio Manager, or in any other capacity that permits the activity. The SEBI Intermediary Database is the authoritative source. NakedPnL does not vouch for any third-party manager.

Digital Personal Data Protection Act 2023

The Digital Personal Data Protection Act 2023 (DPDP Act) is the principal Indian data-protection statute. The Act applies to digital personal data processed in India and to processing outside India that is in connection with offering goods or services to data principals within India. Provisions take effect on dates notified by the Central Government, with implementing rules drafted by MeitY.

Lawful bases used by the platform include performance of a contract for users with an account, legitimate uses for minimal aggregated analytics, and consent for the public listing of a trader's handle and TWR series. Users have rights under Chapter III of the Act — access, correction, erasure, and grievance redressal. Withdrawing public-listing consent removes the registry entry from public endpoints.

India disclaimer variant

The platform applies an India-specific disclaimer at the surface of the user interface. The disclaimer variant key is in, configured in lib/jurisdictions.ts, and reads: NakedPnL is not registered with SEBI as a Research Analyst or Investment Adviser. Data is published as a statistical summary.

Frequently asked questions

Frequently asked questions

Is NakedPnL registered with SEBI?

No. NakedPnL is not registered with SEBI in any capacity — not as an Investment Adviser under SEBI (IA) Regulations 2013, not as a Research Analyst under SEBI (RA) Regulations 2014, not as a Portfolio Manager, Stock Broker, Sub-Broker, Mutual Fund, or Alternative Investment Fund. The platform's posture is that its activity falls outside the SEBI intermediary perimeter.

Does the platform provide investment advice in India?

No. The platform does not collect client risk-profiling information, does not run a suitability assessment, and does not produce client-specific outputs. The same registry data is shown to every reader of a given page. On that basis the platform's analysis is that the activity is general information rather than investment advice within the meaning of the SEBI (IA) Regulations 2013.

Are the published trader returns research reports under SEBI (RA) Regulations 2014?

The platform's analysis is that they are not. A research report under Regulation 2(1)(u) of the SEBI (RA) Regulations 2014 includes recommendations or opinions and provides a basis for an investment decision. NakedPnL publishes historical, factual TWR series without target prices, recommendations, or opinions on any security.

Will NakedPnL deduct TDS under §194S of the Income Tax Act if I trade VDAs through a connected account?

No. NakedPnL does not handle the consideration for any VDA transfer and does not deduct TDS. The exchange or wallet that processed the transaction is the party responsible for §194S compliance under CBDT Circulars 13/2022 and 14/2022. Users remain responsible for their own §115BBH reporting.

Does using a foreign exchange via NakedPnL violate FEMA?

Whether holding balances on or remitting to a foreign venue is permissible under FEMA depends on the user's residency status, the asset, and the route. The platform does not facilitate or fund such accounts; it only reads NAV through a read-only API key. Users should consult a Chartered Accountant or FEMA counsel before using foreign venues.

How do I exercise my rights under the DPDP Act 2023?

Once the relevant provisions of the DPDP Act 2023 and its implementing rules are in force, users can exercise rights of access, correction, erasure, and grievance redressal under Chapter III of the Act. Traders can withdraw their public-listing consent from account settings at any time, which removes the registry entry from public endpoints.

References