The offering will be in the form of unsponsored depository receipts. IFSCA has facilitated the same under the Regulatory Sandbox, the stock exchange said. The entire trading, clearing, settlement and holding of US-listed stocks will be under the regulatory structure of IFSC Authority.
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, India’s largest stock exchange said.
“This will be an innovative product, and one of the key milestones for NSE IFSC that will expand the product coverage of the Exchange beyond existing clientele,” said Chief Executive Officer and Managing Director Vikram Limaye in a press statement.
The platform will provide Indian investors an option to trade in fractional quantities against the underlying shares of a company listed on the US bourses. Investors will be able to hold the depository receipts in their own dematerialised accounts opened in GIFT City and will be entitled to receive corporate action benefits pertaining to the underlying stock, NSE said.
However, 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.
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.
