By Ashma Zaveri
In the last year of the coronavirus pandemic, more than 10 million new investors have joined the equities investing train. Amid the extreme volatility in the stock markets, which pushed most of the blue-chip and blue-chip stocks into the ‘affordable’ price bracket, millennials saw heavyweights like never before, along with other stocks. smaller with strong fundamentals and track records.
Additionally, with the new age digital brokerage platforms making it easier and simpler to diversify the global portfolio, young investors have also invested heavily in global stock markets. More and more young retail investors are buying leading global stocks like Google, Amazon, Facebook, Apple, Tesla, etc., in the hope of obtaining better returns by investing in large markets like the United States. United.
Here are some dos and don’ts for all new investors to follow when investing around the world to ensure that they are able to invest easily and with the utmost security while meeting standards and standards. stipulated regulations.
Valid KYC Details
To invest in foreign markets, a separate account must first be opened with a brokerage firm providing overseas investment services. The best brokers offer a fully digital onboarding experience for opening an account. Although the account can be opened without paperwork, investors will still need to provide valid proof, which includes proof of photo ID and proof of address, to register their know-your-customer (KYC) information with the broker. .
Any government issued photo ID (ID), photo voter ID or PAN card, valid driver’s license, passport or voter registration card can be used as proof of registration. identity and even for proof of address, if the permanent address is the same as that of the current residence. address. Otherwise, any electricity bill, cell phone bill or even bank or credit card statement can be used as proof of address, provided the supporting documents are from current period, that is that is, not more than three months old.
After opening the account, investors can start investing overseas by adding funds to their brokerage account. However, before doing so, they must first carefully understand the government’s disbursement rules for overseas investments.
Under the Reserve Bank of India’s Liberalized Remittance Scheme (LRS), Indian residents are allowed to remit up to $ 250,000 per fiscal year to another country for investments and expenses. This limit is per person, including minors, which means a family of 4 can contribute up to $ 1 million per fiscal year. This quota includes all investments such as US securities, real estate and bank deposits, etc., as well as all expenses such as foreign travel and student education. Investors will need to complete and submit the LRS forms before they can actually start trading.
Forex rate difference
To start investing in global markets, investors will first need to deposit money into their accounts opened with their broker. The money that can be remitted must be denominated in US dollars or any other currency depending on the market in which it is investing. Before deciding how much an investor would like to invest abroad, he should check the exchange rates and try to make the most of them. rate possible with the help of his brokerage.
Safety net on investment
Global investment accounts are held by brokerage houses and clearing service providers on behalf of the investor. Their shares and other securities are held with a depositary on their behalf. So, while selecting a broker for global investment, investors should check the safety nets provided by the brokers to make sure that the investor’s money is safe. Brokers must provide insurance that protects the securities and the cash in the investors’ account.
(Ashma Zaveri is COO at Monarch Global Access. The views expressed are those of the author.)