Retail investors can now buy and sell select US stocks on the NSE IFSC (NSE International Exchange), a wholly owned subsidiary of the NSE, platform starting Thursday, March 3, 2022.
Retail investors can now buy and sell select US stocks on the NSE IFSC (NSE International Exchange), a wholly owned subsidiary of the NSE, platform starting Thursday, March 3, 2022. “Trading will commence for 8 US-based stocks from March 3. Trading in the stocks will be in the form of Unsponsored Depository Receipts,” NSE IFSC said in a circular.
Initially, domestic investors will be allowed to invest in 8 prominent US stocks—Google, Amazon, Tesla, Facebook, Microsoft, Netflix, Apple and Walmart. Later, the NSE IFSC will extend this service to 50 US stocks.
Launched on June 5th, 2017, NSE IFSC Limited offers longer trading hours in various products, including Index Derivatives, Stock Derivatives, Currency Derivatives, Commodity Derivatives and Debt Securities.
Now, starting Thursday, NSE IFSC will also allow trading in 8 select-US stocks, which will be increased to 50 stocks in recent future.
Under the LRS framework of RBI (permits the resident individuals to remit up to USD 2,50,000 per financial year for any permitted current or capital account transaction).
As trading will be in depository receipts, Hemang Jani, Head Equity Strategy, Broking and Distribution, Motilal Oswal Financial Services Ltd, explains how it works and benefits retail investors from this service introduced by NSE IFSC.
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Explaining the trading, Hemang Jani says trading in the stocks will be in the form of Unsponsored Depository Receipts means market makers will buy shares in the US and issue receipts against them. For example, one share of Tesla will be equivalent to 100 NSE IFSC receipts and likewise, Amazon’s one share will be equivalent to 200 IFSC receipts.
NSE IFSC trading benefits for retail Investors
NSE IFSC platform offers various benefits, including an option to trade in fractional quantity.
” It gives you an additional investment opportunity to the Indian investors with easy investment process and at low cost. It also provides an option to trade in fractional quantity / value when compared to the underlying shares traded in US markets. Besides, Investors will be able to hold the depository receipts in their own demat accounts opened in GIFT City and will be entitled to receive corporate action benefits pertaining to the underlying stock,” says Jani.
Steps to Invest in US stocks via NSE IFSC
1 Account Opening: Open trading and demat account with NSE IFSC registered brokers. Presently, there are 36 brokers registered with the NSE International Exchange.
2 Transfer Funds: Transfer funds from your local bank account to NSE IFSC registered broker’s bank account
3 Trading: Once the fund reflects in your broker’s account, you are ready to trade in NSE IFSC US Stocks
What is LRS Scheme?
To buy a stock on the NSE IFSC platform, Indian retail investors will have to transact under the Liberalized Remittance Scheme (LRS) limits prescribed by the Reserve Bank of India (RBI). The LRS framework of RBI permits the resident individuals to remit up to $2,50,000 per financial year for any permitted current or capital account transaction.
Trading Hours Timings
NSEIFSC Receipt Market Open Time: 20:00 hrs
NSEIFSC Receipt Market Close Time: 2:30 hrs (Next Day)
Position Limit/Collateral value Set up cut off time 2:45 hrs (Next Day)
Trade modification end time 2:45 hrs (Next Day)
“Time will be adjusted based on Day Light Saving changes, as applicable and as communicated through circular from time to time. The trading shall be conducted over the span of two calendar days and such trading cycle shall be considered as one single business day,” said the NSE circular.
