Retail investors in India will soon be able to trade US stocks through an NSE platform. NSE International Exchange (NSE IFSC), a wholly-owned subsidiary of the National Stock Exchange of India Ltd (NSE), has announced that it will soon facilitate trading in select US stocks through the NSE IFSC platform.
“The proposed framework will make US equities affordable for Indian retail investors. The offer takes the form of non-sponsored depository receipts. IFSCA made the same thing possible under the regulatory sandbox. All trading, clearing, settlement and holding of US stocks are governed by the regulatory structure of the IFSC agency. This initiative is the first of its kind at IFSC, allowing Indian private investors to do business on the NSE IFSC platform under the Liberalized Remittance Scheme (LRS) limits prescribed by the Reserve Bank of India (RBI), “one said Press release.
The statement states that investors have the option to trade in fractions of quantities / values compared to the underlying stocks that trade in US markets. NSE IFSC Clearing Corporation Limited (NICCL) will offer its risk management framework, facilitate clearing and settlement of all depository receipt trades, and provide a settlement guarantee with respect to all trades executed on the NSE IFSC platform. In addition, all deals will also fall under the NSE IFSC investor protection framework.
Investors can hold the depository receipts in their own Demat accounts opened in Gift City and are entitled to corporate actions in relation to the underlying stocks.
NSE IFSC will announce the operational details shortly and bring the product to market at the earliest possible time. Depositaries, banks and brokers have already started working with NSE IFSC to bring these investment products to Indian investors.
Vikram Limaye, MD and CEO of NSE, said, “This will be an innovative product and one of the most important milestones for NSE IFSC as it will expand the exchange’s product coverage beyond its existing customer base. The product allows residents to easily and inexpensively invest in US stocks under the RBI’s LRS framework (which allows residents to transfer up to $ 2.50,000 per fiscal year for any eligible current or principal account transactions). With guidance from IFSC and the support of all key stakeholders, we hope to have this product ready for use soon. “
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