I came to know that, NSE IFSC exchange is opened for trading from yesterday and it functions till 10.30 pm. Do we have the facility to trade index derivatives in this market. If so, please inform us the procedure to trade in this exchange
Yes index and stock derivatives have started trading on the NSE IFSC exchanges yesterday - Nifty, Bank Nifty, IT index and more. No, retail Indian investors can’t trade them because of the reason below.
The way the international exchanges are set up in GIFT is like say how the free trade zone works in Dubai. It is called IFSC or International Financial Service Center. It is a special economic zone, No STT, CTT, etc. Only MAT (Minimum Alternate Tax) of 9%.
It is an international financial service center, so all business transactions will take place in foreign currencies. So even though the exchange is situated within India, it is as if it were outside the country.
Resident Indians, under Liberalized Remittance Scheme ( LRS), are allowed to invest upto USD 250,000 per year outside India. But this money can be used only to buy stocks, real estate, or any asset which doesn’t have leverage (so no F&O trading).
Currently BSE international exchange (IndiaINX) and NSE IFSC are allowing trading of derivatives only and not equity stocks. Hence, Indian retail clients would not be able to trade on this exchange.
These exchanges will hopefully attract the FII crowd that otherwise trades Nifty on the Singapore or Dubai exchanges. NRI’s have to go through the painful custodial participant route to trade F&O on NSE/BSE, but an international exchange will make it very simple for them.