Fractional shares are partial shares of a company’s stock, allowing investors to purchase a portion of a unit of stock rather than a whole unit. This allows individuals with limited capital to participate in the stock market. Fractional shares/ownership has gained traction in the US Markets but unlike the US, India is in its nascent stages of fractional investing, still at the helm of regulatory scrutiny. However, India should be no exception to this groundbreaking concept of fractional shares and in order to promote the growth of fractional ownership in India, a clear and tailored regulatory framework is essential to address the unique challenges of fractional ownership while ensuring investor protection and market integrity at all times.
To make fractional ownership a success, it is pertinent to educate investors in Indiaabout the advantages and risks of fractional ownership for informed decision-making and building confidence. Simultaneously, brokerage firms should also be encourage to adopt practices through collaborations with depositories and other innovative technologies.
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