Reliance Money-CMC account will help you trade in Corus shares
Reliance Money, the financial services arm of the Anil Dhirubhai Ambani Group (ADAG)-promoted Reliance Capital, is partnering with UK-based CMC Markets, a global player in the online derivatives trading segment, to bring overseas investment products to Indian investors.
This tie-up will enable customers’ of Reliance Money to gain access to several offshore products including —foreign equities, currency and commodities within the RBI-mandated limits. The central bank currently permits a single Indian resident to invest up to $50,000 (Rs 22.5 lakh) overseas per year, which has been raised from the earlier $25,000.
CMC Markets, which has presence across more than 100 countries and has transactions in excess of $1 trillion worldwide over the past two years, offers more than 1,000 instruments across various asset classes. While further details about the tie-up were not available, the product is likely to find a larger audience among the more sophisticated investors, such as large high net worth individuals (HNIs) or institutions, who are keen on diversifying risks across various markets worldwide.
For instance, an investor with Reliance Money can buy Corus shares through an account created for him or her by CMC. The shares will then be credited to the account. If the investor wants to sell, he follows the same procedure, places an order and the shares in the account are offloaded in the market.
“Investors, who normally look at such products, are the cream. It is doubtful, whether this product will be successful with the smaller investors mainly due to lack of knowledge about these markets and discomfort to test their fortune there,” said an official with a top rival brokerage. The partnership is part of Reliance Money’s attempts to offer a gamut of services to its customers, in addition to the domestic brokerage services, which is yet to take off.
Talk of ADAG’s entry into retail broking has changed the dynamics of the industry in the past few months, with several brokerages introducing new products and slashing brokerages rates to match the likely rates of Reliance Money. ADAG’s retail broking venture is expected to send brokerage rates to new lows, at least for the short-term.
Though no formal announcement has been made on the rates, the talk is that Reliance Money may offer a brokerage rate of 7.4 paise on every Rs 100 worth of delivery-based trades, and 2 paise on non-delivery trades, as against the average rate of 15-25 paise for delivery-based trades for every trade worth Rs 100, and 3-5 paise for non-delivery trades. Reliance Money plans to offer products in equities, derivatives, mutual funds, IPOs and insurance products, other than the overseas investment products.