In a first, NSE International Exchange, a wholly owned subsidiary of the National Stock Exchange of India Ltd (NSE), announced that trading in select US Stocks will soon be facilitated through the NSE IFSC platform. The offering will be in the form of unsponsored depository receipts.
IFSCA has facilitated the same under the Regulatory Sandbox. The entire trading, clearing, settlement and holding of US Stocks will be under the regulatory structure of IFSC Authority, stated an official release here Monday. This initiative is a first-of-its-kind at IFSC where Indian retail investors will be able to transact on the NSE IFSC platform under the Liberalized Remittance Scheme (LRS) limits prescribed by the Reserve Bank of India (RBI), it added.
The business model offered by NSE IFSC will not only provide an additional investment opportunity to the Indian investors but also make the entire process of investment easy and at a low cost.
Investors will be provided with an option to trade in fractional quantity / value when compared to the underlying shares traded in US markets. The proposed framework will make US stocks affordable to Indian retail investors.
Vikram Limaye, MD & CEO, NSE 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 operationalize this product soon.”
NSE IFSC Clearing Corporation Limited (NICCL) will offer its robust risk management framework, facilitate clearing and settlement of all trades in depository receipts and provide settlement guarantee in respect to all trades executed on the NSE IFSC platform. Furthermore, all the trades will be covered under the investor protection framework at NSE IFSC.
NSE IFSC will announce the operational details shortly and will launch the product at the earliest possible time. Depositories, banks and brokers have already started working with NSE IFSC to enable these investment products for Indian investors, the release said.