NSE IFSC issues 'omnibus' trade framework to ease market access for overseas investors

NSE IFSC, a subsidiary of the National Stock Exchange, has put in place a framework for 'omnibus' trade, which will help overseas investors escape direct registration process and go through authorised brokers, senior officials have said.

The move will also help in smooth transition of liquidity from Singapore Exchange (SGX) to Indian offshore exchange at Gujarat International Finance Tech (GIFT) City.

The guideline comes at a time when Indian stock exchanges decided to stop providing data feeds to foreign bourses as part of a joint effort to stymie migration of liquidity to overseas markets.

"NSE IFSC has introduced guidelines on omnibus structure, under which FPIs can trade on the bourse through a service provider or authorised broker. Besides, such investors will not be required to register and go through the compliance mechanism," NSE Chief of Business Development Ravi Varanasi told PTI over phone.

Before that, foreign portfolio investors (FPIs) were not allowed to trade in Gift City without setting up an office.

The exchange, which held meeting with all the big foreign players last week, said it has received very encouraging response from them.

Under the guidelines, NSE IFSC said orders of foreign investors need to be routed through eligible segregated nominee account providers for trading.

Providers and trading members will have to furnish to Sebi or NSE IFSC information relating to Know Your Client (KYC) and any other details in relation to accounts of their end-clients, as and when requested by them.

Entities desirous of providing such services must have a net worth of USD 10 million.

The decision by the exchange comes after markets regulator Sebi last month allowed omnibus' trades at the Gujarat's Gift City, the country's only international financial service centre (IFSC).