Looking to invest in US stocks? Leading Indian new-age brokerages, including Groww, Zerodha, Angel One and Upstox, are expanding into overseas equity investing after obtaining licences from the International Financial Services Centres Authority (IFSCA), the regulator overseeing Gujarat’s GIFT City.According to disclosures made by IFSCA, Groww and Upstox have received Global Access Provider (GAP) licences, while Zerodha and Angel One have been granted broker-dealer approvals. With these permissions in place, all four major brokerages can offer Indian retail investors access to international stock markets.Data from the Reserve Bank of India (RBI) showed that Indian investors allocated approximately $440 million to overseas equities in March, marking a 43% increase from the $306 million invested during the same month a year earlier.
What this means
Regulatory approvals were granted to Zerodha and Groww on June 2, while Angel One received its licence on June 12.Under the regulatory framework, GAP licence holders connect directly with US-based brokers for trade settlement. Broker-dealers, on the other hand, facilitate such services by partnering with GAP operators and American brokerage firms.The approvals place Groww and Upstox alongside firms such as Vested Finance and IndMoney, which already operate as GAPs and provide Indian investors with access to global equities.Current Reserve Bank of India regulations allow individuals to remit up to $250,000 annually under the Liberalised Remittance Scheme (LRS), enabling them to invest in overseas assets, including international stocks.Trading activity in US equities surged by around 20% on Friday, according to an ET report published on June 15, with investor interest largely fuelled by excitement surrounding SpaceX’s anticipated public market debut.Zerodha Chief Executive Officer Nithin Kamath had said in October last year that the brokerage was preparing to offer access to US stocks on its platform and had already sought the necessary regulatory approvals to launch the service.GIFT City is also witnessing growing activity as an increasing number of fintech firms seek licences there to broaden their participation in cross-border financial transactions involving India.A recent report in the financial daily said that several payment companies were evaluating the GIFT City framework as a potential route for launching wallet-based services within the international financial centre, enabling them to facilitate international fund transfers and related cross-border payment flows.
