The Hindu : Business : U.S. markets opened up for Indian investors

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Tuesday, Oct 09, 2007
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Business

U.S. markets opened up for Indian investors

ICICI Securities ties up with Pension Financial Services

— PHOTO: PAUL NORONHA

NEW VISTAS: (from left) Warren Bunting, Vice-President, Global Pension Services, with S. Mukherji, Managing Director and CEO, ICICI Securities, and Anil Kaul, Head Retail, launching overseas trading service on ICICI direct.com in Mumbai on Monday.

MUMBAI: Indian investors can now own global blue chip stocks, thanks to ICICIDirect.com launching overseas trading in tie-up with the U.S.’s fourth largest clearing and broker-dealer firm, Penson Financial Services.

ICICIDirect.com on Monday became the first online trading portal in India to offer buying and selling of equities listed on the U.S. stock market, following RBI’s guidelines 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 and CEO Subrata Mukherji said: “The trading portal would provide access to the U.S. market,”

ICICIdirect through Penson Financial will facilitate individual customers to buy and sell equities, exchange traded funds and transact in stock and index options on the U.S. exchanges like the NYSE, Nasdaq and the American Stock Exchange.

“The RBI’s liberalised norms along with our new initiative open new vistas for Indian investors,” ICICI Securities’ Chairman and ICICI Bank’s Managing Director and CEO K. V. Kamath said in a release by ICICI Securities.

“This tie-up is exclusive between Penson Financials and ICICI Bank and we do not see ourselves joining hands with anybody else here in India,” Penson Financial Services’s Vice President (Global Services) Warren Bunting said.

“As per existing 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,” Mr. Mukherji said.

In the derivative segment, investment in futures would not be allowed, as per RBI guidelines this money could not be used for margin trading. Individuals will have to a pay one-time fee of Rs. 999 to register for overseas trading and will have to remit the money to the U.S., through ICICI

Bank’s authorised branch.

The brokerage charge for the trade will be 0.75 per cent 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 U.S. is T+3, a day more than in India where it is T+2, that is, the money is credited in the account two days after the sell order is given by an individual. Individuals could not invest in the IPOs coming out in the U.S. market and could trade only in the secondary U.S. market as per the regulations, Mr. Mukherji said. There was no minimum amount cap while placing a buying order through the portal for the shares in the U.S. market. — PTI

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