Securities Contracts (Regulation) Amendment Rules, 2024

The Department of Economic Affairs, Ministry of Finance, has amended the Securities Contracts Regulation Rules (SCRR), 1956, to simplify the direct listing process for Indian companies on international exchanges within the GIFT IFSC. The amendments, effective from August 29, 2024, lower the minimum public offer and continuous listing requirements to 10% of post-issue capital for companies solely listing on international exchanges. This regulatory change aims to provide Indian start-ups and technology firms with easier access to global capital and strengthen India’s position in the global financial system. By aligning with international standards, the amendments reflect the government’s commitment to creating a competitive and world-class business environment at IFSCs.

Department of Economic Affairs amends Securities Contracts Regulation Rules (SCRR), 1956, facilitating direct listing of securities by public Indian companies on International Exchanges of GIFT IFSC

The Department of Economic Affairs, Ministry of Finance, has amended the Securities Contracts Regulation Rules (SCRR), 1956 to ease the listing requirements for Indian companies seeking to list on international exchanges within International Financial Service Centres (IFSCs) at par with global standards.

‘Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme’ under the Foreign Exchange Management (Non-Debt Instruments), 2019 and Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024 together, provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international stock exchanges at GIFT-IFSC.

To further facilitate this, the new rules stipulate that:

• Minimum Public Offer: For public Indian companies desiring to list solely on international exchanges in IFSCs, the minimum offer and allotment to the public as per the offer document shall be at least 10% of the post-issue capital.
• Continuous Listing Requirements: The continuous listing requirement for such companies has also been set at 10%, as outlined under Rules 19 (2)(b) and 19A of the SCRR.

By reducing these thresholds, the amendments in SCRR facilitate easier access to global capital for Indian start-ups and companies in the sunrise and the technology sectors. This will particularly benefit Indian companies going global and having ambitions to look at opportunities for expanding their presence in other markets.

This initiative underscores the Government’s commitment to providing an agile and world-class regulatory and business environment in the IFSCs, thereby strengthening India’s position in the global financial system.

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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.