Mumbai: Indian investors can now own global blue chip stocks thanks to ICICIDirect.com launching overseas trading in tie-up with USA’s fourth largest clearing and broker-dealer firm, Penson Financial Services.
ICICIDirect.com on 8 October became the first online trading portal in India to offer buying and selling of equities listed on the US stock market following RBI’s guideline allowing individuals to remit up to $200,000 annually in current and capital account transactions including equities.
Launching the overseas trading facility, ICICI Securities’ Managing Director & CEO Subrata Mukherji said: “The trading portal would provide access to US market which is largest in the world and getting access to this market means getting opportunity of investing in global blue chips all over the world.”
ICICIdirect, a popular trading portal with close to 1.3 million customers, through Penson Financial will facilitate individual customers to buy and sell equities, exchange traded funds and transact in stock and index options on US exchanges like NYSE, Nasdaq and American Stock Exchange.
“RBI’s liberalised norms along with our new initiative opens new vistas for Indian investors,” ICICI Securities’ Chairman and ICICI Bank’s MD & CEO K V Kamath said in a release by ICICI Securities.
“This tie-up is exclusive between Penson Financials and ICICI Bank and we don’t see ourselves joining hands with anybody else here in India,“Penson Financial Services’s Vice President, Global Services Warren Bunting said.
Penson is the fourth largest clearing and broker-dealer firm handling about one million settlements daily and has over USD 6.8 billion in assets.
” As per extant RBI’s Exchange Regulations, we are offering delivery-based trading in equities, exchange traded funds and also facility for investing in stock and index options, Mukherji said.
In the derivative segment, investment in Futures won’t be allowed, as per RBI guidelines this money can not be used for margin trading.
The individuals will have to pay one time fee of Rs999 to register for overseas trading and will have to remit the money to US, through ICICI Bank’s authorised branch.
The US equities markets are the most liquid and deepest in the world...more over customers could not only invest in Fortune 500 companies but also buy ADRs of companies from China and other booming markets of Asia.
The brokerage charge for the trade will be 0.75% or $9 which ever is higher, besides the brokerage the remittance fee will be debited by the bank. The money will be remitted within 72 hours of the request made by an individual.
The exchange rate for the remittance will be the day an individual goes for remittance.
The settlement time in the US is T+3, a day more than in India where it is T+2 i.e., the money is credited in the account two days after the sell order is given by an individual.
The individuals can not invest in the IPOs coming out in the US market and can trade only in the secondary US market as per the regulations, Mukherji said. There is no minimum amount cap while placing a buying order through the portal for the shares in the US market.