Indian investors will be allowed to trade in eight key US stocks such as Tesla, Apple, Amazon, Meta Platforms, Microsoft, Netflix, Walmart and Google parent Alphabet via unsponsored depository receipts on NSE International Exchange (NSE IFSC).
NSE IFSC, a wholly owned subsidiary of the National Stock Exchange of India (NSE), has permitted trading in select US stocks through the NSE International Financial Services Centre (IFSC) platform.
Trading in other 42 US stocks will commence in a phased manner. These include Berkshire Hathaway, Adobe, Mastercard, Procter & Gamble, Morgan Stanley, Nike, PayPal, PepsiCo, Pfizer, and Intel among others.
The scheme enables Indian investors to invest in US stocks under the LRS framework of RBI which permits the resident individuals to remit up to $2,50,000 per financial year.
The entire trading, clearing, settlement and holding of US Stocks will be under the regulatory structure of IFSC Authority, NSE said in a circular.
"Trading members are required to note that any remittances made by the clients for the purpose of intra-day trades in NSE IFSC Receipts would be considered as investment in securities and would be permitted through the LRS route subject to the condition that no intraday positions/trades should be permitted which would exceed the overall LRS limit of $2,50,000 per financial year," it said.
Any profits arising out of the sale transaction cannot be used for further purchases till the profits are credited to clients’ account, the exchange added. "For the Indian resident individual clients, any funds lying idle in the account of the trading member for a period up to 15 days from the date of its receipt into the account shall be immediately repatriated to domestic INR account of the client in India."
Base price of NSEIFSC Receipts, on the day of introduction, shall be the price determined by dividing the previous day’s closing price of the underlying security (US Stock price) on the US Exchange with the published DR ratio for each NSEIFSC Receipts.
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, NSE IFSC pointed out. "Investors will be provided with an option to trade in fractional quantity or value when compared to the underlying shares traded in US markets. The proposed framework will make US stocks affordable to Indian retail investors."
All the trades will also be covered under the investor protection framework at NSE IFSC.
