If you want to increase your exposure to your domestic stock market as well as the international stock market, and want to invest in stocks of companies like Apple, Tesla, Microsoft, Alphabet from the comfort of your home in India, then this news is for you. Soon, Indian stock market investors will be able to invest in more than 30 global stock markets from within India. The first phase has started with the US stock market. This information was given by the Managing Director of NSE International Exchange (NSE IX). Let us share what details he gave.
You will get access to more than 30 stock markets
V. Balasubramaniam, managing director and chief executive officer of NSE International Exchange (NSE IX), said in a Money Control report that Indian investors will be able to trade in more than 30 international markets through its global access platform in the next six months, with the United States being the first phase of the rollout. Balasubramaniam described the initiative as a structural expansion of investor access beyond the domestic stock market. “Initially, we went live immediately for the US market, which is a big market that people are interested in. But I think over time, in the next three to six months, we should have over 30 markets available for people to access,” he said.
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), which allows individuals to remit up to US$250,000 per financial year, including overseas investments. Balasubramaniam stressed in media reports that the entire transaction cycle, from onboarding to trading, is designed as per the existing regulations. He further said that this entire investment will be under the Liberalized Remittance Scheme, which has been allowed by the RBI. Each investor can send up to $250,000 annually.
Fractional Investment for Retail Participants
A special feature of the Global Access platform is the ability to conduct fractional trading, which allows investors to buy parts of expensive global stocks instead of the entire share. Balasubramaniam MC said this functionality will be particularly useful for retail investors who want exposure to global technology majors. He further said that retail investors can also use value-based buying or fractionalized buying. For example, Apple is worth $272. If we have $31 in our account, we can fractionalize it.
He further explained, “So, you can say, ‘I want to buy a five-dollar Apple.’ You can have a five dollar Apple. You can take a fractionalized share, and it will be available in your portfolio.” The fractionalization feature is enabled through arrangements with foreign broker partners, allowing value-based execution without the need for large ticket sizes.
Dollar-Denominated Investment Structure
Balasubramaniam said in an interview with Money Control that investments made through the platform will be denominated in US dollars. He said that all investments will be in dollars. So, first of all, the rupee money sent from India will come in the form of foreign money and will come in dollars. The platform can be accessed through web and mobile interfaces. According to Balasubramaniam, the onboarding process is modeled on the digital verification systems widely used in the Indian financial market.
After creating your account, you can complete digital KYC online. It takes only 30 to 45 seconds to complete KYC. This will be done through your Aadhaar 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 once you send the money, you will get a limit on your app. You will know your trading power and limits. After that, you can start placing buy and sell orders.
He further explained that the platform allows investors to create customized watchlists and track global securities. He said that you can create multiple market watches. Basically, you can create any global company you want.
Investing in Global Equity and ETFs
The MC report quoted Balasubramaniam as saying that the product universe on the platform will be limited to the asset classes allowed under LRS rules. He said that there are some restrictions on LRS. “We are allowing equities. We will also allow ETFs. All these products are available on this dedicated platform.” He further said that derivatives and digital asset products have not been enabled. “We will not allow any crypto or digital asset products.”
Institutional participation in later phase
Although the current phase is implemented for resident individual investors, NSE IX has indicated that institutional participation may be included in a later phase. Balasubramaniam said in a media report that in the third phase, we will also enable it for our institutional investors in India. Today, you see many large mutual funds launching outbound investment schemes. Those schemes can also become our customers.