The National Stock Exchange today said that its wholly-owned subsidiary NSE International Exchange will soon be able to facilitate buying and selling of US stocks through its NSE-IFSC platform.
The entire trading, clearing, settlement and holding of US-listed stocks will be under the regulatory structure of IFSC Authority.
Benefit
The 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.
The platform will provide Indian investors an option to trade in fractional quantities against the underlying shares.
Working mechanism
NSE IFSC Clearing Corporation Limited (NICCL) will offer its 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.
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.
Safe
All the trades in the US stocks will also be covered under the investor protection framework at NSE IFSC which will safeguard the interest of the investors.
Drawback
The investment made through the NSE-IFSC in US-listed stocks will be governed by the Reserve Bank of India’s Liberalised Remittance Scheme framework.
Under the LRS framework, an Indian can only remit up to $250,000 outside India in a financial year.
Date of launch
NSE-IFSC said that it will announce the operational details of the new product soon and will launch the product at the earliest possible time.
It further said depositories, banks and brokers have already started working with NSE IFSC to enable these investment products for Indian investors.
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