MUMBAI: Over the next few months, retail investors including NRIs can directly invest in any stocks listed across the world’s 30 largest stock exchanges through the super broker app that the Gift City arm of the NSE International Exchange (NSEIX) is planning to commercially launch. The app, NSE Global Access Platform, is active with all the US stocks available for trade.
The Global Access Platform targets outbound investments under the liberalised remittances scheme (LRS) of the RBI and also allows fractional investing, which is to buy not one stock fully but according to the money in your account, given that some US stocks like Apple are really pricey, and only dollar-denominated trading.
“All the US stocks are available for trade now. Over the next three to six months, we want to enable anybody interested to directly invest in overseas stocks to do so at a fraction of the current charges they pay for select stocks now. Not just American or European blue-chips, we’ll be offering all stocks from across 30 of the world’s largest equity markets,” NSEIX managing director and chief executive V Balasubramaniam told TNIE.
For US access, they have roped in US broker View Trade, while for other markets they are talking to brokers in the respective regions, he added.
While the whole of north America and Europe will be covered, when it comes to Asia, it will be Japan, Hong Kong, Singapore and Korea to begin with. To avoid any tax complications, the facility will be available to those countries with which we have double taxation avoidance treaties, he said.
Balasubramaniam did not say what would be their charges except that it will be much cheaper than what others are charging now. An official, on condition of anonymity, said while for other brokers who offer this service on select blue-chips, an investor has to pay at least 0.50% of the invested money in forex conversion charges and brokerages on an average, the NSE’s would be much lower, say under one-third of that.
A key feature of the platform is the ability to execute fractional trades, allowing investors to purchase portions of high-priced global stocks rather than an entire share, he added, and described the initiative as a structural expansion of investor access beyond domestic markets.
“We have already gone live in the US, which is the biggest market of interest with over 95% of the $1.7 billion invested in foreign stocks going into US stocks,” he said, adding the platform can be described as a super broker app, which will be available on other brokerages as well once it is fully launched.
A key feature of the app is that unlike in the domestic market where you need a demat account to trade, NSE is only asking for a quick KYC which is done online. If you have Digilocker, it is all the more easier to open an account.
The platform is accessible via web and mobile interfaces. According to Balasubramaniam, the onboarding process has been built around digital verification systems widely used in the domestic financial markets.
“Once you create your account, you can do online digital KYC. It takes only 30-45 seconds to complete that. It will be through your Aadhaar authentication and PAN card. It can be done even through your DigiLocker,” he said.
The platform has been designed to facilitate outbound investments within the regulatory framework of the LRS, under which a resident can remit up to $250,000 a financial year for permitted transactions, including overseas investments.
Balasubramaniam emphasised that the entire transaction cycle – from onboarding to trading—is structured to remain compliant with prevailing regulations.
He also noted that investments executed through the platform will be denominated in dollars. “All these investments will happen in dollars. So, the first thing is, your rupee money will be going in a foreign remittances and it will come into a dollar,” he said.
“In the LRS, there are certain restrictions. What we are allowing is equities. We will allow you ETFs. All these products are available on this particular platform,” he clarified, adding derivatives and digital asset products are not allowed and so is shorting of stocks.
“For obvious reasons, we have not enabled derivative, other digital assets like cryptos because that is not allowed under the LRS,” he said.
While the current phase targets resident individual investors, he said at a later stage institutional participation could be thought about.
“At some point of time, in phase three, we will also enable it for our institutional investors. Today you are seeing a lot of big mutual funds which are coming up with outbound investment schemes. Even those schemes can become our customers,” Balasubramaniam said.
Highlighting the scale of trading activity at NSE IX, Balasubramaniam said volumes in its flagship Gift Nifty derivatives contracts have expanded sharply following the migration of offshore trading.
“Today, on average, I can say we trade almost $100 billion plus every month, working out to over $5 billion average daily trading volume,” he said.
Balasubramaniam reiterated the broader vision for the exchange within the international financial centre framework. “Our vision statement is very simple. We want to become the preferred financial gateway to bring inbound investments into the country and to also enable outbound investments to the rest of the world,” he said.