If you now want to move towards international stock markets along with domestic stock markets. If you want to invest in shares of companies like Apple, Tesla, Microsoft, Alphabet etc. from the comfort of your home in India, then this news is for you only. Soon Indian stock market investors will be able to invest in more than 30 stock markets of the world sitting in India themselves. The first phase has already started from the American stock market. This information has been given by the Managing Director of NSE International Exchange (NSE IX) himself. Let us also tell you what kind of information he has given.
Will get access to more than 30 stock markets
NSE International Exchange (NSE IX) Managing Director and Chief Executive Officer V Balasubramaniam said in a Money Control report that it will allow Indian investors to trade in more than 30 international markets through its Global Access Platform in the coming six months, in which the United States has been rolled out in the first phase. Balasubramaniam described this initiative as a structural extension of investor access beyond the domestic stock market. He said that initially, we have immediately gone live for the US market, which is a big market of interest. But I think after some time, in the next three to six months, we should have more than 30 markets available for people to access.
Outbound Investment under LRS Framework
The Global Access platform is designed to facilitate outbound investment under the regulatory framework of the Reserve Bank of India (RBI)’s Liberalized Remittance Scheme (LRS), under which residents are allowed to remit up to US$250,000 per financial year, including foreign investments. Balasubramaniam stressed in the media report that the entire transaction cycle from onboarding to trading has been made as per the existing rules. He said that this entire investment will be under the Liberalized Remittance Scheme, which is allowed by RBI. Each investor can remit up to $250,000 in a year.
Fractional Investment for Retail Participants
A special feature of the Global Access platform is the ability to make fractional trades, which allows investors to buy portions of high-priced global stocks instead of the entire share. Balasubramaniam MC reports that this functionality will be especially useful for retail investors who want exposure to global technology majors. He said that for retail investors, they can also do value-based buying or fractionalized buying. For example, Apple is worth $272. If we have $31 in this account, we can fractionalize it.
He further said that so, you can say, I want to buy a five dollar Apple. You can get an Apple for five dollars. You can take a fractionalized part, and it will be available in your portfolio. The fractionalization facility is enabled through arrangements with overseas broker partners, thereby facilitating value-based execution without the need for large ticket sizes.
Dollar-Denominated Investment Structure
Balasubramaniam said in an interview to Money Control that the investments made through the platform will be in US dollars. He said that all these investments will be in dollars. So, the first thing is that rupee money from India will go in foreign remittances and it will come in dollars. The platform is accessible through web and mobile interfaces. According to Balasubramaniam, the onboarding process is built around digital verification systems widely used in the Indian financial market.
He said, once you create your account, you can do digital KYC online. It takes only 30 to 45 seconds to complete that KYC. This will happen through your Aadhar authentication and PAN card. This can also be done through your DigiLocker.
After completing the verification, investors can send funds to a designated GIFT City bank account linked to the trading infrastructure. Balasubramaniam told that as soon as you send money, you will get the limit on your app. You will know what is your trading power and what is the limit. After that, you can start placing buy orders and sell orders.
He further said that this platform allows investors to create customized watchlists and track global securities. He said that you can make many market watches. In fact, you can create any global company of your choice.
Investing in Global Equities and ETFs
Balasubramaniam quoted the MC report as saying that the product universe on the platform will be limited to the asset classes permitted under the LRS rules. He said that there are some restrictions in LRS. We are allowing equity. We will also allow you to have ETFs. All these products are available on this special platform. He further said that derivatives and digital asset products have not been launched. We will not allow any kind of crypto or digital asset product.
Institutional participation in later phase
Although the current phase involves resident individual investors, NSE IX indicated that institutional participation may be included in the subsequent phase. Balasubramaniam said in the media report that in the third phase, we will also enable it for our institutional investors in India. Today you see a lot of big mutual funds launching outbound investment schemes. Those schemes can also become our customers.