Zerodha To Launch US Stock Investing For Indian Traders Soon

Zerodha, India's largest online stock brokerage platform, is set to launch investment options for the US market in the upcoming quarter, as revealed by founder and CEO Nithin Kamath during a recent Ask Me Anything session on YouTube.

Zerodha’s Big Leap into US Markets

Acknowledging numerous inquiries from users on social media about US investments, Kamath stated, “We are actively working on it and we should have something ready in the next quarter. This will be a product launch.” Until now, Zerodha has refrained from offering US investment products, even as competitors like Angel One, INDmoney, JM Financial, Axis Direct, HDFC Securities, Kuvera and 5paisa have rolled out similar services.

Kailash Nadh, the CTO of Zerodha, pointed out that the company now possesses the required regulatory clarity through GIFT City, opening doors for a straightforward and seamless experience for users both on the frontend and backend. “We are in the process of implementing a host of technological advancements to support this initiative,” Nadh added.

Overcoming Past Challenges for US Expansion

It seems Zerodha's interest in US stocks isn't new. Back in 2020, their CEO, Nithin Kamath, actually mentioned this possibility. However, he had to put the plans on hold. The main hurdles then were finding a US-based brokerage partner to handle the transactions and navigating the complexities of remittance (money transfer) regulations, all of which were complicated by the COVID-19 pandemic.

Despite the pandemic-related setbacks, the Indian market witnessed remarkable retail participation soon after, with platforms like Groww, Zerodha, Angel One and Upstox witnessing exponential growth in their customer bases and revenues.

Why Now? GIFT City’s Role in Simplifying Global Investments

A key factor aiding Zerodha's upcoming product launch is GIFT City, India's designated international financial hub. Transactions executed there fall under the Foreign Exchange Management Act (FEMA), creating an environment similar to that found in financial centers like Dubai or Singapore. This status allows for simplified international stock investments through platforms such as India INX's Global Access and NSE-IX's Unsponsored Depository Receipts (UDRs), specifically for US stocks.

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In GIFT City, all financial services, including banking, equity markets and insurance, are operated under the unified oversight of the International Financial Service Centre Authority (IFSCA). This setup simplifies the rules for global investors, making it easier and more seamless to dive into opportunities here.

A Strategic Move for Growth

The bottom line is, Zerodha is poised to make a significant move into the US investment arena, reflecting its strategy to adapt to evolving market needs and capitalise on emerging opportunities.