This is a new gate for Indian Stock Market as you can trade on eight US Stocks from today 8 PM. SEBI has approved NSE IFSC Exchange which is a subsidiary of SEBI. International Financial Services Centre platform will start trading in eight US Stocks from Gujarat International Finance Tec-City, Gandhi Nagar from March 3.
What This Means For A Retail Investor?
Indian retail investors will now receive a platform where they can trade on popular US Stocks like Amazon, Google, Apple and five others that have been approved by SEBI. Do not think that these stocks are getting listed on National Stock Exchange but it will be in form of unsponsored depository receipts. Retail investors will be able to buy shares in US and will get receipt issued in their names.
The receipts will be called as NSE IFSC receipts that will be used for trading transactions through brokers that will be registered under NSE IFSC. Earlier retail investors in India used to buy shares in US market through a registered broker in US.
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What Stocks Will Be Traded?
Currently, NSE has specified eight US Stocks that will be traded on exchange. The list includes Tesla Inc (TSLA), Meta Platforms (FB), Microsoft Corp (MSFT), Netflix Inc (NFLX), Apple Inc (AAPL), Walmart Inc (WMT), Alphabet Inc (GOOGL) and Amazon Inc (AMZN).
Number of specified stocks will be increased in a phased manner and 50 stocks will be available for retail investor in India. Other stocks that will soon be added are Mastercard, JP Morgan Chase, Morgan Stanley, Berkshire Hathaway, Paypal, Nike, Pepsico, Intel and Pfizer.
How To Trade In US Stocks?
First you will have to open a Demat Account with NSE IFSC registered broker and currently there are 36 such brokers. Most of the large brokerage houses have registered themselves on NSE IFSC. After that you will have to transfer your money from your bank account to demat account after which you can trade in US Stocks. Reserve Bank of India has prescribed a Liberalised Remittance Scheme where you can transact on 250,000 dollars in a financial year.
Heman Jani of Motilal Oswal has said, “Investors get the option to trade in fractional quantity/value when compared to the underlying shares traded in US markets. Investors will be able to hold the depository receipts in their own demat accounts opened in GIFT City and will also be entitled to receive corporate action benefits pertaining to the underlying stock.”