Is fractional share investing possible in India?
Fractional investing or the ability to invest say $10 in Amazon at $3200 has been the biggest reason for stock market participation to go up in the US. We applied under SEBI regulatory sandbox to launch the same in India. Our learnings by Somnath Mukherjee. We made that application with a startup that had reached out to us Rainmatterin and was rejected.
In the US, stocks bought by customers are held in the street name of the broker, unlike in India, where stocks are held in a customer’s beneficiary account with a depository. Brokers in the US hold securities in their name & create fractional units by creating book entries for clients. This is a high-risk practice. The fact that it isn’t possible is one of the many reasons why our capital market infra & regulations are much better than the US.