ICICI arm launches overseas trading service
ICICIdirect.com, the online broking arm of ICICI Securities, today launched its overseas trading service that will allow its resident Indian customers to buy and sell equities across 13 US stock exchanges, including NYSE and Nasdaq.
ICICIdirect.com has tied up with Penson Financial Services, the fourth largest clearing and broker-dealer company in the US, as its overseas trading partner. Penson Financial Services handles about 10,00,000 settlements everyday and has over $6.8 billion in assets, including customer assets.
The Indian company is looking for similar tie-ups in other parts of the world, such as Europe, to allow Indian investors to buy equities listed on London Stock Exchange, or other markets, where the regulations permit such investments.
Following the tie-up, ICICIdirect.com’s clients can invest in US stocks including ADRs, exchange traded funds, stock options and index options.
The Reserve Bank of India allows resident Indians to invest up to $2,00,000 per annum abroad, encouraging ICICIdirect.com to launch the product, its executives said.
With Indian stock prices trading at record levels, the platform offered by ICICIdirect.com allows Indian investors to diversify a part of their savings in other markets, they said.
The overseas trading service will be available to individual customers of ICICIdirect.com on a one-time nominal fee payment of Rs 999.
Clients will be charged Rs 360 ($9 or 75 bps, whichever is higher) per transaction, in addition to the remittance charges. The money will be remitted only through ICICI Bank branches authorised for this purpose.
S Mukherji, Managing Director and CEO, ICICI Securities Limited said, “We believe that Indian investors are looking at diversifying their portfolio and overseas trading service enables them to do so. The US equity markets are most liquid and deepest in the world and allow investors to spread country and sectoral risk more effectively. Customers could also invest in sectors which are under-represented in India such as biotechnology, semiconductor and internet based companies.”
Warren Bunting, vice-president, Global Penson Services of Penson Financial Services, said the tie-up with ICICIdirect.com was exclusive, and it does not have plans for similar tie-ups with other brokerages in India. Penson Financial has a presence in Hong Kong, Canada and the UK, besides the US.