How to Buy US Stocks through NSE IFSC

The National Stock Exchange has recently announced that Indian retail investors can directly trade US stocks via NSE IFSC(International Financial Service Center). Let us discuss how to buy US stocks through NSE IFSC in detail.

NSE IFSC is a wholly-owned subsidiary of the NSE(National Stock Exchange), and it is approved by the SEBI(Securities and Exchange Board of India). NSE IFSC was based in GIFT city in Gujarat. The full form of GIFT is Gujarat International Finance Tech City.

NSE IFSC is basically a stock exchange platform for international stocks. They are allowed to trade in index derivatives, stock derivatives, currency derivatives, commodity derivatives, etc.

According to the media reports, the NSE IFSC got approval for 50 US stocks, but only eight stocks are available to the investors for trading on 3rd march 2022. The trading date for the remaining 42 US stocks will be decided soon. Here is the list of US stocks available for trading from 3rd march 2022

How to invest in US stock via NSE IFSC

• Firstly you need to open a demat and trading account with an NSE IFSC registered stockbroker. Currently, there are 36 brokers registered with NSE IFSC.
• You have to transfer funds from a bank account to a stockbroker’s account. Once the funds are credited to the broker account, you can start trading.
• Investors can start trading with the listed US stocks, but they will get the stocks in the form of depository receipts. These receipts are named as NSE IFSC receipts. The investors can use these receipts for trading transactions via NSE IFSC’s registered brokers.
• NSE IFSC authorized financial institutions will buy the shares of the US stocks and will issue retail investors in the form of depositary receipts.

Few Things to know before investing in the US stocks

1) Investment in US stocks should be made in US dollars only. The maximum amount invested by an individual should be up to 2,50,000 Dollars per financial year. The retail investors can make the payment via the LRS (Liberalized Remittance Scheme) of RBI(Reserve Bank of India).

2) Investors can buy the shares fractionally while buying US stocks. The minimum amount to buy the share is 0.01 Dollars.

3) While investing in US stocks, you must pay the following charges like brokerage, forex inward charges, etc. All the charges will change from broker to broker.

4) There will be charges while withdrawing money from your account.

5) In the US, dividends paid to the investors are taxable. So when a company announces a dividend, the broker will subtract the taxable amount from the dividend amount and will pay the remaining amount to the investors. Usually, the taxable amount on the dividend is flat 25%

6) Individuals who are interested in investing in US stocks can also invest via international mutual funds. 

7) The depository receipts you receive will be considered as shares. Every 100 receipts will be considered as 1 share.

8) The trading timings for NSE IFSC is 8:00 Pm to 2:30 Am. Trades can be settled in T+3 days.

9) The trading holidays are based on US and Indian market holidays.

List of Registered Stock Broker with NSE IFSC