1. Fractional Quantity: For Indian investors’ convenience of buying these US shares, NSE IFSC has devised a system of buying them in fractional quantities too. For example, suppose Amazon is trading at $3,000 a share in New York, but you do not want to invest $3000 (around Rs 2,27,000) right now, you can buy, say, one-tenth of the share by paying $300 (Rs 22,700).
2. Spread: The difference between the buy and sell call for a share is called a spread. NSE IFSC has decided to keep this spread at $0.01. For example, there will be a buy call for Amazon at, say, $3000.01 and a sell call for Amazon at $3000.02.
3. Dynamic Price Band: To ensure a safe and risk-free trading experience, the price band has been intentionally kept at 10 per cent of the value of the security. This means that the maximum loss or gain an investor will suffer or enjoy in a single day is capped. For example, suppose Amazon is trading at $3000, you can’t place a buy or sell order beyond $3,300 or $2,700 that day, respectively.
4. No Short Selling: NSE IFSC has decided to disable short-selling mechanisms for retail investors in these US stocks. For example, on the BSE or NSE, you can sell shares even if you do not have them in your demat so that when the price falls you can cover the short sale and take home the profit. On NSE IFSC, retail investors will not be allowed to do that.
5. Intraday Allowed: Every transaction on the NSE IFSC will have to be backed by an adequate amount in monetary terms. Intraday trading is allowed but every sell transaction should be either backed by NSE IFSC receipts or should be a sell transaction against an open buy position created during the day.
“IFSC is mainly formed to provide access to foreign markets and capital. Various tax holidays are provided to businesses to set up offices in IFSC, to increase financial product offerings in a regulatory-friendly environment,” says Vijay Kuppa, co-founder, Orowealth, a wealth and investment management fintech startup.