INSUBCONTINENT EXCLUSIVE:
A high-level panel Tuesday recommended market regulator Sebi to allow direct listing of Indian companies on overseas bourses and of foreign
firms on Indian exchanges.
Currently, Indian companies can list their shares through depository receipts abroad, while foreign companies
need to go through the Indian Depository Receipt route for listing of equities.
Moreover, Indian firms can list their debt securities
directly on international exchanges through a security instrument known as 'Masala Bonds'.
In its 26-page report, the committee has
suggested for direct listing of Indian companies overseas and vice versa
It has recommended that the framework should allow listing only on specified stock exchanges in 'Permissible Jurisdictions'.
Permissible
Jurisdiction, includes a jurisdiction which has treaty obligations to share information and cooperate with Indian authorities in the event
of any investigation.
Equity listings by companies incorporated in India on foreign stock exchanges would allow them to access foreign
The Indian economy, in turn, will experience added growth and economic development.
Similarly, equity listings of companies incorporated
outside India on Indian bourses would improve the efficient allocation of capital and diversification for investors across the Indian
economy.
The panel has suggested, "listing of equity shares of unlisted companies incorporated in India on foreign stock exchanges would be
governed by the listing framework of the concerned Permissible Jurisdiction
The relevant Indian laws like Companies Act would also continue to apply to such companies".
The KYC (Know your client) and AML (anti-money
laundering) framework existing in Permissible Jurisdictions should be taken as acceptable standards for compliance.
