Stock exchanges in Gujarat International Finance Tech (GIFT) City want the government to allow retail investors to trade on their platform. A proposal in this regard has been submitted to the high-level task force on the International Finance Services Centre (IFSC) that comprises officials from the Ministry of Finance and the Reserve Bank of India (RBI).

The task force will be meeting this month to decide on various proposals, sources aware of the development said.

The proposal was made by the BSE promoted India International Exchange and is also supported by NSE International Exchange and GIFT, the sources said. In recent times, a large number of domestic brokers and high frequency traders who are active on the BSE, NSE and the Multi Commodity Exchange have acquired membership of GIFT. They have done so via their overseas sister companies.

Liberalised scheme

Some of the popular entitites that have registered themselves include Anand Rathi, Globe Capital, Phillip Capital, Kotak Bank, Marwadi International, Estee, Bonanza, Antique and Edelweiss.

As of now, Indian residents can transfer up to $250,000 (about ₹1.5 crore) annually for investment or trading purposes to any exchange in the world under the Liberalised Remittance Scheme (LRS) of the RBI. GIFT is considered as an offshore venue and the same LRS scheme can be extended to the stock exchanges there with just a notification, the sources said.

The exchanges have reasoned that there would be no harm in extending the LRS to GIFT since the rules under the scheme are clear and it could boost volumes and bring back money from overseas exchanges, the sources said. “If domestic brokers can be allowed and can enjoy the tax benefits of trading on GIFT, so should the retail investors,” said a official linked to the GIFT

The Gandhinagar-based GIFT is the brainchild of Prime Minister Narendra Modi and was established to compete with financial hubs like Singapore, Dubai and London.

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