- Zerodha will offer US stock investments via GIFT IFSC by April or May 2024
- IFSCA licenses from 2025 enable brokers to partner with global brokerage firms
- Zerodha aims to provide retail investors access and compliance support for US stocks
Zerodha, the online brokerage firm, will be offering an option to invest in the United States stocks via GIFT IFSC (Gujarat International Finance Tec-City-International Financial Services Centre), as soon as April or May this year.
The information was given by the Vice President (VP) of Zerodha, Somnath Mukherjee, while speaking at the GSMC 2.0 (Global Securities Market Conclave) in Mumbai today.
“Our brokerage has been tracking this space for a long time,” Mukherjee said, “But a few issues were pain points.”
Mukherjee added that in 2025, IFSCA introduced licences that allowed brokerage firms, like his, to partner with global brokers.
He said that a broker-dealer who plans to undertake activities as a global access provider (GPA) in GIFT ISFC needs to obtain authorisation from the IFSCA.
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He added that many banks now offer Liberalised Remittance Scheme (LRS) remittances online. “Our brokerage does not have the license so far. It is up to us now, people with distribution on how we go about it,” Mukherjee said, adding that wealthier people always had access through wealth arms, but it was the retail who did not have access till now.
“It has become important for retail investors not to keep all eggs in one basket,” Mukherjee said. He asserted that his brokerage would not just offer support around the product but also compliance support. “It is all about the last-mile delivery that players like Zerodha can solve,” he said.
Mukherjee highlighted the need for creating content and communicating to the investors why diversification is necessary, given the way the world is moving. A broker-dealer, with no direct relationship with a foreign broker, is considered to be an ‘introducing broker', and a broker dealer which has a direct relationship, for providing access to global markers is considered to be a ‘global access provider'.
Both of them (the introducing broker and the global access provider) may onboard clients directly through a referral arrangement with an entity based in India, IFSC or a foreign jurisdiction.
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