Introduction: In a significant development, the Working Group on “Direct Listing of Listed Indian Companies on IFSC Exchanges” has presented its report to the Chairperson of the International Financial Services Centres Authority (IFSCA) on December 20, 2023. This initiative, propelled by the Hon’ble Union Minister of Finance and Corporate Affairs of India in July 2023, sets the stage for groundbreaking changes in the cross-border listing landscape.
Detailed Analysis:
Background and Formation of the Working Group: Prompted by the announcement in July 2023, the Working Group, chaired by Mr. Praveen Trivedi, Executive Director of IFSCA, was formed to explore the possibilities of direct listing of equity shares of Indian Companies on IFSC Exchanges. The group comprised members from the Ministry of Corporate Affairs, Department of Economic Affairs, Securities and Exchange Board of India, and key market participants.
Global Benchmarking and Recommendations: A noteworthy aspect of the Working Group’s efforts was the comprehensive study of best practices for cross-border listings by companies in various global jurisdictions, including the USA, Canada, UK, EU, Australia, New Zealand, and Hong Kong. Drawing insights from these practices, the Working Group has put forth recommendations, including models for connecting depositories between jurisdictions, to facilitate the operationalization of Direct Listing at GIFT IFSC.
Regulatory and Operational Aspects: Beyond the fundamental framework, the report delves into regulatory and operational considerations for dual-listed companies. It proposes mechanisms for seamless cooperation between institutions and authorities in both jurisdictions. Moreover, the report identifies necessary changes in legal frameworks essential for implementing the proposed Direct Listing on IFSC stock exchanges.
Vision for Foreign Capital: IFSCA expresses confidence that the report’s recommendations align with the Government of India’s vision, facilitating the inflow of foreign capital into India through GIFT IFSC. The report not only lays down a roadmap for direct listings but also aims to enhance the attractiveness of GIFT IFSC as a global financial hub.
Conclusion: The release of the Working Group’s report signals a transformative phase in the financial landscape, unlocking the potential for direct listing of Indian Companies on IFSC Exchanges. The global best practices considered and the meticulous recommendations made by the Working Group underscore the commitment to fostering an environment conducive to cross-border financial activities. As stakeholders assess the implications of these recommendations, the vision of GIFT IFSC as a hub for raising foreign capital gains momentum, positioning India on the global financial map with renewed vigor.
PRESS RELEASE
Report of the Working Group on “Direct Listing of Listed Indian Companies on IFSC
Exchanges”
The Working Group on “Direct Listing of Listed Indian Companies on IFSC Exchanges” has submitted its report to Chairperson, IFSCA on December 20, 2023.
This Working Group was constituted pursuant to the announcement by the Hon’ble Union Minister of Finance and Corporate Affairs of India on July 28, 2023, to allow direct listing of equity shares of Indian Companies on IFSC Exchanges (“Direct Listing”). The Working Group was chaired by Mr. Praveen Trivedi, Executive Director, IFSCA with members from Ministry of Corporate Affairs, Department of Economic Affairs, Securities and Exchange Board of India and market participants.
The Working Group studied the best practices for cross-border listing by companies in various jurisdictions viz., USA, Canada, United Kingdom, European Union, Australia, New Zealand, Hong Kong etc. Based on the study of the global best practices, the Working Group has recommended models for connecting depositories between the two jurisdictions for the purpose of operationalizing Direct Listing at GIFT IFSC.
The Working Group has made several other recommendations with respect to regulatory and operational aspects of dual listed companies, cooperation between institutions and authorities in both jurisdictions and necessary changes required in various legal frameworks to implement the proposed Direct Listing on the stock exchanges in IFSC.
IFSCA believes that the recommendations made in this report will contribute towards implementation of the vision of Government of India to facilitate raising of foreign capital into India through GIFT IFSC.
The report of the Working Group can be accessed here.
Read : Report of the Working Group on Direct Listing of Listed Indian Companies on IFSC Exchanges
