The National Stock Exchange (NSE) through its GIFT City arm in the International Financial Services Centre (IFSC) has brought in new facilities that will enable investors to buy and sell US Stocks.
The NSE International Exchange, which is a wholly-owned subsidiary of the NSE India announced that US Stocks would be available for trade and delivery.
This means that Indian investors can now buy and sell stocks in companies like Tesla, Apple, Google, Microsoft and other prominently listed US entities. The offerings will be in the form of unsponsored depository receipts.
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.
Here are some of the details available about NSE IFSC.
How many stocks would be available?
About 50 stocks are to be made available for trading and investing from both New York and Nasdaq stock exchanges. The stocks will be trading just like NSE in NSE IFSC.
Are ETFs available?
Yes, about 5 ETFs including SPDR S&P 500 ETF Trust (SPY) are to be available.
What are the trade timings?
The trade timings are same as US markets - 7 PM TO 1.30 AM (IST)
Can I trade in the existing trading account with my broker?
No. You need to open a new trading account with Demat with your existing broker, provided he is offering the services. Most brokers are likely to offer the same.
How the pricing is going to be done?
Each US stock will be priced in the range of USD 3 to 5, approximately Rs.200-400.
Will more stocks be available for trading?
Yes, more stocks and ETFs are likely to be included in the near future. The exchange is expected to be operational in 2 to 3 months time.
Taxation:
There is going to be No STT and the taxation will be applicable as per GIFT City regulations.
This is an an innovative product from NSE and it enables resident individuals to easily and cost effectively invest in US stocks. Experienced with investors and HNIs are likely to show keen interest in this.
Most retail and small investors are better-off investing through existing mutual funds like SPX 500, Nasdaq 100 and FANG+ index funds.
