On November 4, 2015, SEBI issued a circular to prescribe a
format for reporting holding patterns for Indian Depository
Receipts ("IDRs") on a quarterly basis,
disclosure norms for corporate governance and guidelines for
compliance for two – way fungibility of IDRs,
("SEBI Circular"). The SEBI Circular
will come into effect with the coming into effect of the Listing
Regulations, since the SEBI Circular has been issued pursuant to
provisions contained in the Listing Regulations. Some of the
conditions set forth by the SEBI Circular are summarised below:
Listed entities that have issued IDRs
should file the holding pattern of the same on a quarterly basis
within 15 (fifteen) days of the end of a quarter, in the
Listed entities should submit to the
relevant stock exchange, a comparative analysis of corporate
governance provisions that are applicable in such a listed
entity's home country and in other jurisdictions in which its
equity shares are listed along with the compliance of the same and
in relation to corporate governance requirements applicable to
other listed entities;
As per the Listing Regulations, IDRs
will have two-way fungibility, guidelines and procedure for which
are prescribed. Further, an issuer may provide the said fungibility
to IDR holders by permitting the IDRs to be converted into
underlying shares and/or by selling them in the foreign market upon
Guidelines for fungibility of future
IDR issuance, stipulate that IDRs will not be redeemable into
underlying equity shares before the expiry of 1 (one) year
period from the date of listing of IDRs.
Permitting two-way fungibility of IDRs will attempt enhance
investors' interests in investing in IDRs, which should enable
the IDR market to improve from its existing condition.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The Ministry of Corporate Affairs notified on June 5, 2015 that certain provisions of the Companies Act, 2013 shall not apply to private limited companies or shall apply with such exceptions or modifications as directed in the notification.
Whilst trade and barter have existed since early times, the modern practice of forming business relationships through the means of contract has come into existence only since the industrial revolution in the West.
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