Indian brokerage firm Zerodha is planning to offer US stocks on its trading platform. However, the timeline for the services is yet to be determined.
"We have been working internally on offering US stocks on the Zerodha platform, by partnering with a US-based stockbroker," Nithin Kamath, Founder & CEO, Zerodha told Moneycontrol adding that their will likely be no minimum investment required.
He did not reveal the brokerage firm they have tied-up with in the US.
Kamath said that for the offering to be a success they need a proper remittance mechanism.
"Currently, Indian resident investors need to fill a physical A2 form and submit it to a bank branch for each remittance, which then further takes 7-10 days to be credited to the overseas trading account," he said. "The current cost of it is not feasible for average retail investors to continuously invest small amounts or set up a SIP on stocks/ETFs listed in the US."
He said the firm is working with banks and regulators to attempt and enable small-ticket remittances digitally, where a physical form would be required beyond a certain amount.
"With the current lockdown, it has been challenging to collaborate with banks & regulators given the various other priorities which they may currently have," Kamath added.
Speaking on the advantages of having exposure to the US markets, Kamath said that the millenials resonate with new-age tech companies and it has become a crucial part of their day-to-day lives. "Also, diversifying and hedging on the rupee as a currency, makes it an attractive proposition."
"However, this would take off in a bigger manner only if the broken experience and cost of remittance is solved for," he added.
He further added that the services may take longer than previously anticipated due to COVID-19-led disruptions.
Some of the other Indian brokerages that facilitate investment in foreign stocks are HDFC Securities, ICICI Securities and Axis Securities.
Also, some foreign brokerages have a direct presence in India, including US-based brokerage Interactive Brokers LLC. Similarly, a US Securities and Exchange Commission (SEC) registered investment advisor, Vested Finance, offers stocks, exchange-traded funds (ETFs) and custom-made portfolios called- vests- to Indian investors.
UK's FCA regulated Winvesta also offers US stocks and ETFs. International multi-currency accounts for global investing is in the pipeline as well, the company told Moneycontrol.
Recently, Motilal Oswal opened the subscription for its Motilal Oswal S&P 500® Index Fund
, an open-ended scheme replicating/tracking the S&P 500® Index.