airbnb: ETMarkets Smart Talk: Indians buy Disney, Airbnb; U.S. IPOs are still far from overdone, says Viram Shah
Vested Finance has become the first Indian entity to obtain a FINRA broker’s license. What does this mean to you and how do you see it?
Vested Finance allows Indian investors to place money in US markets. Now, through our affiliated entity – VF Securities – we are a FINRA-registered US broker-dealer. It is the only Fintech platform operating in India that has been licensed by FINRA, the regulator of brokers and traders in the United States. FINRA is regulated and audited by the Securities and Exchange Commission (SEC).
FINRA is dedicated to protecting investors and safeguarding market integrity in a way that facilitates vibrant financial markets. As a government-authorized non-profit organization, it oversees more than 624,000 brokers across the country and ensures that the industry operates fairly and honestly.
Investments through the Vested platform have always been covered by Securities Investor Protection Corporation (SIPC) insurance through its clearing house, Drivewealth, and fall under the jurisdiction of the Securities and Exchange Commission. Now that Vested is a US broker, investing in securities through the Vested platform is also subject to US broker regulations.
For us, this is a step towards building greater trust with our clients and at the same time providing them with more investment options by expanding our investment pool to over 5,000 stocks.
What change do these licenses bring to your investors? What new products and facilities would be made available to investors? After that, do Indian investors participate in IPOs in the United States?
Investors can access over 5,000 ETF stocks and options through Vested. Along with this, they can also access OTC titles. Global companies that are part of the OTC list (via ADRs) are like LVMH Moet Hennessy, Nissan Motor Company, Porsche Automobil, Allianz, Volkswagen AG to name a few.
But unfortunately, Indians cannot participate in US IPOs at the moment.
After the United States, do you envisage another international market where Indians could invest? For example Asian giants like Japan, China or European markets like the UK, Germany or France?
Given the huge opportunity offered by the United States, the focus is currently on providing solutions that appeal to the American market. However, our goal is to provide our clients with cross-border opportunities that they could not access before. Offering more markets is one of the ways we can get closer to our goal.
The dollar was near a lifetime high, and the rupee is at an all-time high. Do you think this will have an impact on the investments of Indians, who would need national currency to buy American stocks? How do you see that?
We believe that investing in US markets is an essential element of geographic diversification in a portfolio. Markets have been weak in 2022, and we’ve seen evidence that investors are buying into the dips, especially when it comes to big tech stocks. A weaker rupee also makes US investing more attractive, but that shouldn’t be the only reason to invest in US markets. With markets continuing to be under pressure, this growth could slow.
The US market has been in a bearish grip. From mega-caps to retail favorites, all stocks have been on a downward trajectory. Do you see investors buying this fall on your platform? Which sectors or stocks have been their favorites over the past month?
Investing in giants such as Apple, Google, Meta, Microsoft, Netflix, Tesla and others is only possible through US markets, which is why investors mainly buy tech stocks. They are also buying Disney, Airbnb and Berkshire Hathaway, among non-tech stocks.
These companies have the potential to increase their revenues while controlling the associated costs. Investors with cash can buy these stocks to reap the benefits when the market cycle turns, and we enter a growth phase again.
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