NSE IFSC – HOW TO INVEST IN US STOCKS FROM INDIA
While Indian stock markets provide ample trading opportunities for traders to earn profits and invest for the long term, it still leaves something to be desired. A crash in the markets takes away a huge chunk of investor wealth and leaves people distraught. This could be remedied by diversifying your portfolio to safeguard your money. Many people prefer investing in US stocks for this reason. It also allows you to grab opportunities that are not available in our markets. To help you figure out if this is a method suitable for you, we have posted this article on how to invest in US stocks from India.
If you want to trade stocks that have been listed on US Stock Exchanges from India, you can now do it through NSE IFSC.
NSE IFSC
NSE IFSC is a wholly owned subsidiary of the National Stock
Exchange. IFSC stands for International Financial Services Centre. It is
regulated by IFSCA, which is the International Financial Services Centre
Authority. Before IFSCA was established, IFSC was regulated by domestic financial
regulators like the Securities Exchange Board of India (SEBI), Reserve Bank of
India (RBI), Insurance Regulatory and Development Authority (IRDAI), and
Pension Fund Regulatory and Development Authority (PFRDA). NSE IFSC is
headquartered at GIFT City, Gandhinagar, Gujarat.
NSE IFSC Limited offers trading in various products including index derivatives, stock derivatives, currency derivatives, commodity derivatives, and debt securities.
HDFC Bank IFSC Banking Unit (IBU) is the NSE IFSC Receipts Custodian that will instruct the US Custodian, Deutsche Bank AG, New York, to hold the underlying shares for which the Unsponsored Depository Receipts (DRs) have been issued for trading on the NSE IFSC. CDSL IFSC Limited has been appointed as the Registrar responsible for maintaining the register/records of holders of each series of Receipts.
NSE IFSC Receipt
An NSE IFSC Receipt is an Unsponsored Depository Receipt. It is a negotiable financial instrument issued by HDFC Bank Limited IBU, which is an IFSCA-recognized custodian for NSE IFSC Receipts.
An NSE IFSC Receipt is created without the involvement or participation of the Underlying Companies. It would give the holder of such receipt a proportionate beneficial interest in the share of the underlying company. The shares will be held by a custodian in the USA. The custodian in the USA will issue Unsponsored DRs to the NSE IFSC Depository Account and these will then be traded on NSE IFSC.
Trading can only be carried on underlying shares held by the custodian directly. These shares shall not be issued by ETFs or Investment Funds that are registered with the SEC (Securities and Exchange Commission) under the U.S. Investment Company Act as investment companies.
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