Buying US stocks via Gift City to get easier as Zerodha, others get nod
Four of India's largest retail brokerages — Zerodha, Groww, Angel One, and Upsto have received regulatory clearance from the International Financial Services Centres Authority (IFSCA)
Four of India's largest retail brokerages — Zerodha, Groww, Angel One, and Upsto have received regulatory clearance from the International Financial Services Centres Authority (IFSCA) to operate as intermediaries out of Gift City, Gujarat's international finance hub. The approvals mean all four platforms are now positioned to let Indian retail investors trade US stocks.Filings disclosed by the IFSCA show that Groww and Upstox were granted Global Access Provider (GAP) licences, while Zerodha and Angel One were cleared as broker-dealers. Zerodha and Groww received their approvals on June 2, with Angel One following on June 12.The two licence types work somewhat differently. A GAP licence holder connects directly with a broker based in the US to handle trade settlement.
A broker-dealer, by contrast, settles trades indirectly, by routing through a GAP-licensed partner that in turn works with the US broker.With this approval, Groww and Upstox join a group of platforms already offering cross-border investing as GAPs, including earlier entrants such as Vested Finance and IndMoney. These offerings are built around the Reserve Bank of India's Liberalised Remittance Scheme (LRS), which permits resident individuals to remit up to $250,000 abroad each year — money that can, among other uses, be invested in foreign stocks.Appetite for overseas investing appears to be building. The Economic Times reported on June 15 that US stock trading volumes out of India rose by roughly 20% in a single Friday session, a jump it linked largely to investor excitement around SpaceX's stock market debut.
Separately, RBI data shows Indian investors put around $440 million into global equities in March, a 43% increase over the $306 million invested in the same month the previous year.Zerodha's move into this space had been signalled earlier: CEO Nithin Kamath said last October that the company was working to enable US stock investing on its platform and had already applied for the necessary licences.Also read: $6 billion double dhamaka coming: Jio and NSE likely to file for India's biggest IPOs this weekMore broadly, activity in Gift City is picking up, with a growing number of fintech firms seeking licences that would let them tap into cross-border money flows to and from India.
The Economic Times reported separately on May 5 that payment companies were also exploring the Gift City route, looking to set up wallet services within the international finance centre that could support similar cross-border transfers.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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