Securities Contracts (Regulation) Amendment Rules, 2024

The Ministry of Finance issued a notification on August 28, 2024, introducing amendments to the Securities Contracts (Regulation) Rules, 1957, under the Securities Contracts (Regulation) Act, 1956. These changes define terms related to International Financial Services Centres (IFSCs) and the International Financial Services Centres Authority. The amendment specifically alters rule 19, adjusting the minimum public shareholding requirement for companies listed on recognized stock exchanges in IFSCs from 25% to 10%, simplifying the listing process. Rule 19A is also modified to reflect the same reduction in the public shareholding threshold for IFSC-listed companies. These amendments aim to facilitate the listing of securities in IFSCs by easing regulatory requirements. The changes are effective from the date of publication in the Official Gazette. The notification continues a series of amendments to the 1957 rules, aligning them with evolving financial market practices, especially concerning the operations within IFSCs, which are integral to India’s strategy to become a global financial hub.

MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 28th August, 2024

G.S.R. 518(E).— In exercise of the powers conferred by section 30 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Central Government hereby makes the following rules further to amend the Securities Contracts (Regulation) Rules, 1957, namely:–

1. (1) These rules may be called the Securities Contracts (Regulation) Amendment Rules, 2024.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Securities Contracts (Regulation) Rules, 1957 (hereinafter referred to as the said rules), in rule 2, after the clause (c), the following clauses shall be inserted, namely: –

‘(ca) “International Financial Services Centre” means an International Financial Services Centre as defined in clause (g) of sub-section (1) of section 3 of the International Financial Services Centres Authority Act, 2019 (50 of 2019);

(cb) “International Financial Services Centres Authority” means the Authority established under sub-section (1) of section 4 of the International Financial Services Centres Authority Act, 2019 (50 of 2019);’.

3. In the said rules, in rule 19, in sub-rule (2), in clause (b), after the fourth proviso, the following explanation shall be inserted, namely: –

“Explanation. – For the purposes of this clause, the provisions of sub-clause (i) shall apply to, or in relation to, an applicant company desirous of getting its securities listed on a recognised stock exchange in an International Financial Service Centre, subject to the modification that the reference to “twenty-five per cent.” in that sub-clause shall be construed as reference to “ten per cent.”, irrespective of the post issue capital of such company and sub-clauses (ii), (iii) and (iv) shall not apply.”.

4. In the said rules, in rule 19A, after the explanation to sub-rule (6), the following explanation shall be inserted, namely: –

“Explanation. – For the purposes of this rule, the provisions of sub-rules (1) to (5) shall apply to, or in relation to, a company listed on a recognised stock exchange in an International Financial Service Centre, subject to the modification that references to “twenty-five per cent.” in those sub-rules shall be construed as references to “ten per cent.” and the first proviso to sub-rule (5) shall not apply to such company.”.

[F. No. 1/2/2024-PM]

SURBHI JAIN, Jt. Secy. (Financial Markets)

Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3 vide number S.R.O, dated the 21^st February, 1957 and subsequently amended vide numbers as under:

(1) S.R. 1096, dated the 14^th July, 1967;

(2) S.R. 685, dated the 3^rd June, 1972;

(3) S.R. 959, dated the 8^thAugust, 1972;

(4) S.R. 2641, dated the 1^st November, 1975;

(5) S.R. 1083, dated the 11^th November, 1985;

(6) S.R. 666(E), dated the 20^th July, 1987;

(7) S.R. 1070(E), dated the 15^th November, 1988;

(8) S.R. 870(E), dated the 13^th November, 1992;

(9) S.R. 617(E), dated the 20^th November, 1993;

(10) S.R. 749(E), dated the 12^th October, 1994;

(11) S.R. 790(E), dated the 7^th November, 1995;

(12) S.R. 121(E), dated the 9^th March, 1995;

(13) S.R. 291(E), dated the 27^th March, 1995;

(14) S.R. 581(E), dated the 23^rd December, 1996;

(15) S.R. 654(E), dated the 8^th August, 2000;

(16) S.R. 655(E), dated the 8^th August, 2000;

(17) S.R. 415(E), dated the 7^th June, 2001;

(18) S.R. 696(E), dated the 28^th August, 2003;

(19) S.R. 395(E), dated the 10^th June, 2009;

(20) S.R. 469(E), dated the 4^th June, 2010;

(21) S.R. 662(E), dated the 9^th August, 2010;

(22) S.R. 705(E), dated the 25^th October, 2013;

(23) S.R. 21(E), dated the 16^th January, 2014;

(24) S.R. 611(E), dated the 22^nd August, 2014;

(25) S.R. 682(E), dated the 22^nd September, 2014;

(26) S.R. 819(E), dated the 19^th November, 2014;

(27) S.R. 125(E), dated the 26^th February, 2015;

(28) S.R. 268(E), dated the 20^th March, 2017;

(29) S.R. 664(E), dated the 28^th June, 2017;

(30) S.R. 822(E), dated the 3^rd July, 2017;

(31) S.R. 675(E), dated the 25^th July, 2018;

(32) S.R. 738(E), dated the 3^rd August, 2018;

(33) S.R. 189(E), dated the 19^th March, 2020;

(34) S.R. 485(E), dated the 31^st July, 2020;

(35) S.R. 423(E), dated the 19^th June, 2021;

(36) S.R. 520(E), dated the 30^th July, 2021 and

(37) S.R. 03(E), dated the 2nd January, 2023.