Several leading foreign brokerages have evinced interest in setting up operations in international financial services centre (IFSC) at Gift City, stock exchange officials said.
However, none of them have so far received markets regulator Sebi's go-ahead, they added.
India International Exchange (INX), a subsidiary of BSE, has started operations in January last year. The National Stock Exchange launched its own operation five months later.
These exchanges allows foreign investors to trade using dollars in Indian equity and commodity derivatives.
Besides, they provide competitive advantage in terms of tax structure and supportive regulatory framework. These include benefits in security transaction tax, commodity transaction tax, dividend distribution tax and long-term capital gain tax waivers and no income tax.
According to a senior official of stock exchange, many foreign brokerages have shown interest to participate in IFSC, however, the Securities and Exchange Board of India (Sebi) has not given approval to a single overseas brokerage.
Currently, close to 50 Indian stock brokers are trading on these exchanges and around 100 have already received "No-objection" certificate from the markets regulator.
A senior official of a foreign brokerage houses said that they are interested in setting-up shops in the country but there are lack of clarity over regulatory front.
He further said Sebi has allowed registered as well as non-registered foreign portfolio investors FPIs to trade in IFSCs under eligible foreign investor (EFI) category, however, it is not possible practically.
In case EFIs try to open their account with a bank that has its operations in Gift (Gujarat International Finance Tech) City, they are unable to do the same as RBI guidelines do not allow them to open an account for trading purposes, he added.
Some of the market participants believe that international brokerages are in 'wait and watch' mode due to the upcoming general election as they want to see if there is consistency on the policy and regulatory fronts before investing in the country.
The Gift City, established in Gujarat, has been set-up with the idea of India's answer to Hong Kong or Singapore or Dubai, wherein foreign investors can transact Indian securities with minimal tax and bureaucracy, and for domestic companies to raise funding in foreign currencies.
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