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ICICI Sec connects US SEs to resident Indians
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Online service will allow buying and selling of equities
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Direct to US: (From left) Mr Warren Bunting, Vice-President, Global Penson Services; Mr S. Mukherji, Managing Director & CEO, ICICI Securities Ltd; and Mr Anil Kaul, Head Retail; at the launch of overseas trading service on ICICI direct.com in Mumbai on Monday. - Paul Noronha
Our Bureau
Mumbai, Oct. 8
ICICI Securities has extended its online trading facility for investments in listed securities in the stock exchanges in US for its resident Indian customers.
This overseas trading service will allow resident Indians to buy and sell equities, exchange traded funds and transact in stock and index options across all US stock exchanges.
"This service aims to provide investors the opportunity to invest in securities and options abroad as it is one of the most liquid markets and as a tool for customers to diversify across geographies and sectors," said Mr Anil Kaul, Director and CEO of ICICI Securities' retail operations.
How it works
To fund this account with US dollars, money can be remitted to Penson - a US broking outfit - by a wire transfer facility offered by ICICI Bank, whereas to repatriate the profits back to India, a withdrawal request needs to be given to ICICI Securities. Investors will thus have a client relationship with only the US broking outfit for purposes of overseas investments.
Individual customers can, however, use the existing accounts that they may have with ICICI Securities for online trading in the domestic market, for trading in the US markets as well.
The Web site will also provide news and data from global agencies such as Dow Jones and Reuters.
The overseas investment facility covers pre-market offers as well, the company said.
Prospects
The brokerage charges for an overseas transaction will be 75 basis points or $9, whichever is higher.
"The proportion of informed stock investors in India is low and in this you cannot really expect them to have proper information about companies abroad," said an analyst from a Mumbai-based brokerage house, responding to a question on the prospects of retail investors taking to this in a big way.
The timing is also a factor to consider. Indeed, if anything there is a reverse flow. "Currently, there is fear of recession in the US markets and institutional investors are looking at emerging markets more seriously now," the analyst added.
Market men also point out that in the short- to medium-term the prospect of continuing rupee appreciation neutralises dollar returns from such investments.
ICICI Securities has tied up with Penson Financial Services Inc, a clearing and broker-dealer firm in the US as its overseas trading partner.
The service is being offered consequent to the liberalisation of overseas investment norms by the Reserve Bank of India that permits investments by resident Indian individuals to remit up to $2,00,000 in a financial year.
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