In response to rising demand in US-listed companies, the NSE International Exchange (NSE IFSC) said on Tuesday that it will provide infrastructure for Indian investors to purchase US stocks.
According to The Times of India, the new infrastructure would allow investors to acquire fractional shares of US equities by opening Demat accounts with businesses situated in the GIFT city’s International Financial Services Centre (IFSC).
In the press release from NSE IFSE, it is mentioned that the IFSC Authority would regulate all trading, clearing, settlement, and holding of US equities. According to NSE IFSE, the IFSC Authority has permitted the offering under its regulatory sandbox, where financial transfers for purchase would be made through the RBI’s Liberalised Remittance Scheme (LRS).
In the current scenario, Indian investors purchase US equities through approved internet brokers who are affiliated with both US and Indian regulators. These brokers enable you to own a millionth of a share of a US stock.
NSE MD & CEO, Vikram Limaye, said: “This will be an innovative product, and one of the key milestones for NSE IFSC that will expand the product coverage of the Exchange beyond existing clientele. The product enables resident individuals to easily and cost-effectively invest in US stocks under the LRS framework of RBI (which permits the resident individuals to remit up to USD 2,50,000 per financial year for any permitted current or capital account transaction).”
“With the guidance of IFSC authority and the support of all the key stakeholders involved, we hope to operationalise this product soon,” Limaye said.
Tapan Ray, GIFT City’s MD and Group CEO, stated that GIFT City is fast establishing itself as a financial gateway for investment in India and worldwide, with an ecosystem of foreign banks and exchanges, and capital market intermediaries.
“It is the right time to get such an innovative product especially from an Indian perspective; we have seen over a period that Indians have started investing in global stocks. We congratulate NSE IFSC for this new endeavour and wish them great success,” Ray added.
For investments in US-listed firms, the NSE-IFSC will be controlled under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS) framework. Under the LRS system, an Indian can only send $250,000 outside of India in a single financial year.
How You Can buy/sell US stocks?
- Open a Demat account with a broker registered with NSE IFSC in GIFT City
- Do Your KYC
- After the creation of the account, The LSR option now allows you to send funds up to $250,000.