NSE IFSC International Exchange Physically Settled US Stocks For The First Time

* Settlement was completed flawlessly in all symbols which had been launched for trading. This marks a historic moment for NSE IFSC as it marks the beginning of physical settlement of US Stocks (in the form of Unsponsored Depository Receipts) in GIFT IFSC

NSE International Exchange (NSEIFSC) launched trading in NSE IFSC Receipts (unsponsored depository receipts on US Stocks under IFSCA’s regulatory sandbox framework) on March 3rd, 2022. The product offers Indian retail investors to trade in global stocks using the Liberalized Remittance Scheme (LRS) route. To start with, NSE IFSC commenced trading in major US stocks (Apple, Alphabet, Amazon, Microsoft, Meta Platforms, Tesla) to be settled on a rolling T+3 day basis through its Clearing Corporation Ltd (NICCL). 

NSE IFSC and NICCL announced that the first physical settlement of NSE IFSC Receipts has been completed on March 8, 2022. According to their press release, “settlement was completed flawlessly in all symbols which had been launched for trading. This marks a historic moment for NSE IFSC as it marks the beginning of physical settlement of US Stocks (in the form of Unsponsored Depository Receipts) in GIFT IFSC."

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As per the press release, this is the first time when the trading, settlement, as well as Demat holding related to an investment in US Stocks, has been facilitated in GIFT IFSC through the international depository. It added that the first Indian retail investor to trade at NSE IFSC using the LRS route on 3rd March, 2022 was Satish Agarwal, a client of Globe Capital (IFSC) Limited.

The entire trading, clearing, settlement and holding of US Stocks will be under the regulatory structure of IFSC Authority.

As per NSE IFSC’s press release in August 2021, this route makes the entire process of investment internationally easy and at a low cost for Indian retail investors. Investors will be provided with an option to trade in fractional quantity / value when compared to the underlying shares traded in US markets making it affordable to them.

Indian retail investors can trade in select US stocks via NSE-IFSC platform

The trading in unsponsored depositary receipts -- NSE IFSC Receipts -- has been launched in association with HDFC Bank, under the regulatory sandbox framework prescribed by the IFSCA

NSE IFSC, a wholly-owned subsidiary of the National Stock Exchange of India, on Thursday said it has launched trading in unsponsored depositary receipts, which will offer Indian retail investors an opportunity to invest in the US stocks listed on bourses like NYSE and NASDAQ in an easy and affordable way.

The trading in unsponsored depositary receipts -- NSE IFSC Receipts -- has been launched in association with HDFC Bank, under the regulatory sandbox framework prescribed by the IFSCA, according to a statement.

Following this launch, Indian retail investors will be able to transact on the NSE IFSC platform under the liberalised remittance scheme (LRS) prescribed by the Reserve Bank of India (RBI).

NSE IFSC Receipts are an innovative first-of-its-kind product offering to Indian retail investors, by providing them with an opportunity to diversify their investment in top-performing companies of global economies.

These receipts will make the entire process of investment in global stocks seamless and at a low cost. Investors will be provided with an option to trade in fractional quantity when compared to the underlying shares traded in global markets.

Starting with US stocks, NSE IFSC will soon widen its offering to other global markets, the statement noted.

HDFC Bank's IFSC Banking Unit in the GIFT City (HDFC Bank-IBU) in its role of NSE IFSC Receipts Custodian to this newly launched UDR programme will issue the NSE IFSC Receipts. The bank will undertake related activities besides opening the depositary accounts of investors as a depository participant registered with IFSCA registered depositaries.

Further, NSE IFSC Clearing Corporation Limited will offer its robust risk management framework, facilitate the clearing, and settlement of all trades in depositary receipts and provide the settlement guarantee with respect to all trades executed on the NSE IFSC platform.

Moreover, all the trades will also be covered under the investor protection framework at NSE IFSC. Investors will be able to hold the NSE IFSC Receipts in their own demat accounts opened in GIFT City and will be entitled to receive corporate action benefits pertaining to the underlying stock.

"Today's launch of trading in NSE IFSC Receipts is a good initiative to attract retail participation under the liberalised remittance scheme of the RBI and develop a vibrant capital market ecosystem in India's sole International Financial Services Centre (IFSC) at GIFT City," IFSCA Chairman Injeti Srinivas said.

According to him, this innovative offering from NSE IFSC enables retail resident investors to transact in select US stocks through the NSE IFSC platform initially under the regulatory sandbox framework and eventually as a regular product on the exchange for all international and domestic investors.

"With this launch, we have unlocked significant value to Indian retail investors and brokers, and we look forward to building on our position as an Integral and Innovative International IFSC exchange," NSE Managing Director and CEO Vikram Limaye said.

HDFC Bank Executive Director Kaizad Bharucha said the bank has been a pioneer and has been playing a catalytic role in transforming the Indian financial services space.

The NSE IFSC Receipts framework will also make these investments affordable and transparent, thereby paving way for retail participation, he added.