The Ministry of Corporate Affairs vide a notification dated 24th January, 2024, has unveiled a groundbreaking regulatory framework titled "The Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024". This set of rules, effective from their publication in the Official Gazette, marks a significant shift in the landscape for Indian companies seeking to access international capital markets.

Key Aspects of the New Rules:

1. Broad Definitions and Authority Involvement:

– The Rules are underpinned by the Companies Act, 2013, and involve the International Financial Services Centres Authority (IFSCA) as a key regulatory body.
– Definitions extend to include terms from the Companies Act, 2013, the International Financial Services Centres Authority Act, 2019, and other relevant legislation.

2. Scope and Application:

– Applicable to both unlisted and listed public companies, these rules allow them to issue securities for listing in permissible jurisdictions as defined in the First Schedule.
– The Rules align with regulations and directives from the Securities and Exchange Board of India (SEBI) and the IFSCA.

3. Provisions for Unlisted Public Companies:

– Unlisted public companies with fully paid-up shares can issue equity shares for listing in permissible jurisdictions, including offers for sale by existing shareholders.
– These companies must adhere to the Central Government's Direct Listing Scheme and comply with additional conditions specified by SEBI if they also seek listing in India.

4. Compliance and Reporting Requirements:

– Companies must file their prospectuses in the specified e-Form LEAP-1, along with prescribed fees.
– Post-listing, companies must follow Indian Accounting Standards in addition to other relevant standards for financial reporting.

5. Eligibility Criteria:

– Certain companies are not eligible for equity share listing under these rules. These include companies which-
" has been registered under section 8 or declared as Nidhi under section 406 of the Act;
" is a company limited by guarantee and also having share capital;
" has any outstanding deposits accepted from the public as per Chapter V of the Act and rules made thereunder;
" has a negative net wort

Implications for Indian Corporates:

This regulatory advancement opens new avenues for Indian companies to tap into international capital markets while ensuring adherence to stringent compliance and governance standards. It represents a strategic move towards integrating Indian businesses into the global financial ecosystem, enhancing their visibility and access to foreign investment.

Compliance and Future Outlook:

Companies aiming to leverage these new rules must carefully evaluate their eligibility and ensure strict adherence to the comprehensive compliance requirements outlined. This development is anticipated to catalyze significant growth opportunities for Indian corporates on international platforms.

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