Here's how to invest in US stocks through NSE IFSC | Mint – Mint

  • NSE IFSC had recently announced trading in 50 popular US stocks like Apple, Amazon, Google

NSE International Exchange (NSE IFSC), a wholly owned subsidiary of the National Stock Exchange of India (NSE), had recently announced trading in 50 popular US stocks like Apple, Amazon, Google.
It has created a lot of buzz among investors who’ve been looking for easy ways to get exposure to these stocks. While the stock exchanges in GIFT City were primarily set up for easy access to Indian stocks and derivatives for NRIs and foreigners, this is the first product for onshore Indian investors.
In the wake of this, stock broking platform Zerodha has shared a blog where it explained in detail on how to invest in US stocks via NSE IFSC.
Key things to know about investing in US stocks via NSE IFSC
– Currently, investing in US stocks is in the regulatory sandbox (test), which means that NSE IFSC will only be able to onboard a fixed number of customers. More customers will be allowed only once IFSCA gives the final approval on the product.
– Trading is open from 8 PM IST until 2.30 AM IST. Since some of these US stocks are valued between hundreds to thousands of dollars per share, trading in fractionals or owning shares of these companies in multiples of $10 to $20 is also allowed.
– The entire trading, clearing, settlement and holding of US Stocks will be under the regulatory structure of IFSC authority. The investments will be in the form of unsponsored depository receipts for Indian investors.
– 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.
– When a company listed on exchanges in one country wants to attract investors and trading in another country, it is done through Depository Receipts (DRs). If the company offers the DR, it is called sponsored DR and if the company isn’t involved, it is called unsponsored DR. Indian companies like Infy, ICICI Bank, Wipro, and others trade on US stock exchanges through sponsored DRs.
– A T+3 day settlement, which means stocks or DRs once bought will get credited after 3 days (it is 2 days in India) to the demat account. Similarly, funds from stocks sold will get credited after 3 days. Unlike in India, no further transactions will be allowed until the settlement.
– Apart from whatever the brokerage firm facilitating the transaction on NSE IFSC will charge the customer, the exchange itself will charge 12 cents for every $100 or 0.12%.
– Finally, Zerodha is in the process of getting membership and it said will be live in a few months once it receive the necessary approvals from the Indian exchanges and SEBI.
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