NSE IX (NSE International Exchange), a fully owned subsidiary company of National Stock Exchange of India Limited (NSE), currently regulated by IFSCA, allows Indian residents and non-resident investors to own US stocks from India. Indian retail investors can only invest in NSE IX receipts (US Stocks) under the LRS route by becoming the client of a trading member of NSE IX. Also, Non- Resident Indians (NRIs), Foreign Portfolio Investors (FPIs), and Eligible Foreign Investors (EFIs) can trade in these products by becoming the client of a trading member of NSE IX. No prior approvals are required for NRIs to trade in the NSE IX products.
India INX proposes to offer stocks from the US, Canada, UK, Europe, Australia, and Japan, covering about 80 percent of the investing universe. Eventually, India INX will provide access to over 130 exchanges across 31 countries worldwide, covering global exchanges in America, Europe, Asia Pacific and Africa. Some of the exchanges to be offered are NYSE, Nasdaq, LSE, Canadian Securities Exchange, Toronto Stock Exchange, BATs Europe, Euronext France and Tokyo Stock Exchange.
Before you begin investing in US stocks, you must first convert your INR into USD as per the rules under the Reserve Bank of India’s (RBI) Liberalized Remittance Scheme (LRS). Currently, under the LRS rules, any resident individual, including a minor ( countersigned by a guardian) is allowed to remit up to 2.5 lakh US dollars (USD 2,50,000 ) in each financial year. At an exchange rate of Rs 90 to a dollar, it is about Rs 2,27,50,000 or Rs 2.27 crore.
Those investors who wish to diversify their portfolio with US stocks may consider opening a trading account with a registered broker of NSE IX. As of now, there are 50 US stocks in the form of Unsponsored Depository receipts that Indian investors can invest in. What makes it interesting for Indian investors is the option available to buy fractional shares of US listed companies. For example, to buy one share of Amazon, one needs to shell out approx Rs 60,000 as the stock trades around $654. An Indian investor can buy half of Amazon’s stock worth Rs 30,000.
After opening your trading and demat account with NSE IFSC-registered brokers, you can transfer funds from your local bank account to NSE IFSC-registered brokers’ bank account. Once the fund reflects in your broker’s account, you are ready to trade in NSE IFSC US Stock.
On buying US Stocks, what you, as an investor, get is an NSE IFSC Receipt. An NSE IFSC Receipt is a negotiable financial instrument like an unsponsored ‘depository receipt’, issued by the NSE IFSC Receipts Custodian, namely HDFC Bank Limited IFSC Banking Unit (HDFC Bank IBU), based on underlying securities issued by a U.S.- listed company, which gives the holder of such NSE IFSC Receipts a proportionate beneficial interest in the underlying security itself.
NSE IFSC US Stocks are unsponsored Depository Receipts. By acquiring NSE IFSC US Stocks, the investors get exposure to the financial performance of the underlying shares and the benefit of certain rights attached to such underlying shares, without acquiring it directly.