{"id":6547,"date":"2024-01-10T16:04:31","date_gmt":"2024-01-10T10:34:31","guid":{"rendered":"https:\/\/aayushbhaskar.com\/?p=6547"},"modified":"2024-02-10T21:26:28","modified_gmt":"2024-02-10T15:56:28","slug":"nse-ifsc-guide-for-beginners","status":"publish","type":"post","link":"https:\/\/aayushbhaskar.com\/nse-ifsc-guide-for-beginners\/","title":{"rendered":"How to Invest in U.S. Stocks with NSE IFSC – Beginners Guide","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"
Indian investors have been waiting for this a long time. NSE IFSC recently announced trading in 50 popular US stocks in the form of unsponsored depository receipts for Indian investors.<\/p>\n
Deposit receipts can be deposited into your Demat account opened through an approved GIFT City Broker.<\/p>\n
You can trade on the NSE IFSC platform within the Liberalized Remittance Scheme (LRS) mandated by the Reserve Bank of India (RBI).<\/p>\n
If you are looking for information on NSE IFSC and how to trade in International stocks, then you are at the right place.<\/p>\n
Here, I will tell you about the things which can surely help you in getting the information, and that too in simple language.<\/p>\n
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Let us understand the important concepts related to this recent innovation by NSE IFSC.<\/p>\n
NSE IFSC is an abbreviation of the National Stock Exchange – Indian Financial System Center.\u00a0\u00a0<\/span><\/p>\n NSE IFSC Limited (also known as NSE International Exchange) is a\u00a0<\/span>fully owned subsidiary company<\/span><\/em><\/strong>\u00a0of the National Stock Exchange Limited (NSE).<\/span><\/p>\n NSE IFSC has set up an international exchange in GIFT City, Gandhinagar. It is the first international exchange established on the recommendation of the Securities and Exchange Commission (SEBI). <\/span><\/p>\n The idea is to provide a platform for Indian corporates to raise resources from global investors and Indian investors to invest in global markets.<\/span><\/p>\n GIFT City is a business city, located in Gandhinagar, Gujarat.<\/span><\/p>\n It is being built by Gujarat International Finance Tec-City (GIFT) Company Limited, a 50:50 joint venture between the Government of Gujarat and the Government of India, with investments from private sector investors.<\/span><\/p>\n It is being developed as a global financial and IT services hub on the lines of similar global hubs such as the Wall Street (United States), Lujiazui (China), Shinjuku (Japan), La D\u00e9fense (France), and Canary Wharf (United Kingdom).<\/span><\/p>\n The development will be focused on creating a dedicated International Financial Services Center (IFSC) that will offer world-class infrastructure, institutional support, and a regulatory environment for the growth of the financial services sector in India.<\/span><\/p>\n It will also have a Special Economic Zone (SEZ) that will provide additional benefits to companies located there. Click here<\/a> to know more about GIFT City.<\/span><\/p>\n A depository receipt is a negotiable certificate that represents the ownership of one or more shares of a company traded on a local exchange and held in custody by a foreign bank.<\/span><\/p>\n Depository receipts allow you to invest in overseas markets without opening an account abroad or establishing a foreign residency. <\/span><\/p>\n They are traded on the local stock exchange but reflect the price of the underlying shares that they represent on the foreign exchange. <\/span><\/p>\n The investor benefits from any dividend<\/a> or interest payments made by the foreign company and makes money only when he sells his depository receipts at a profit.<\/span><\/p>\n If the company provides a DR, it is called a sponsored DR, and if the company is not involved, it is called an unsponsored DR.\u00a0<\/span><\/p>\n Indian companies such as HDFC, ICICI Bank, Dr. Reddy’s, Infosys, and Wipro are traded on U.S. exchanges through sponsored Depository Receipts.<\/span><\/p>\n However, the top 50 U.S. companies will be traded on NSE IFSC through unsponsored Depository Receipts.<\/span><\/p>\n DRs traded on NSE IFSC are unsponsored. In other words, companies based in the U.S. are not issuing depositary receipts. <\/span><\/p>\n NSE IFSC has partnered with the HDFC’s International Banking Unit, which holds U.S. shares on behalf of NSE IFSC, and HDFC-IBU will issue DRs to NSE IFSC’s depository account in India.<\/span><\/p>\n <\/p>\n Under the Liberalized Remittance Scheme (LRS) introduced by the Reserve Bank of India (RBI), you can freely purchase foreign exchange up to U.S. $250,000 per financial year (April\u2013March) for any permissible current or capital account transaction, or a combination of both.<\/span><\/p>\n That means you can purchase securities up to the U.S. $250,000 in a financial year, which is approximately 1.9 Crores at present.<\/span><\/p>\n You can buy US stocks<\/a> the same way you buy other Indian securities. <\/span><\/p>\n You can follow these simple steps and become an investor in the world’s largest companies listed on the U.S. stock exchange.<\/span><\/p>\n No.<\/span><\/p>\n On March 3rd, NSE IFSC began trading unsponsored depositary receipts on eight U.S. equities.<\/p>\n You can trade on the following eight U.S. stocks and the facility for trading on the remaining 42 stocks will soon be facilitated through the NSE IFSC under the unsponsored depositary receipts (DR) route.<\/span><\/p>\nGIFT City<\/span><\/h3>\n
Depository Receipts (DRs)<\/span><\/h3>\n
Sponsored and Unsponsored Depository Receipts<\/span><\/h3>\n
Role of HDFC in NSE IFSC<\/span><\/h3>\n
Liberalized Remittance Scheme (LRS)<\/span><\/h3>\n
How to Invest in US Stocks in NSE IFSC?<\/span><\/h3>\n
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Do you have a choice of U.S. Stocks?<\/span><\/h3>\n
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