Follow Us :

Securities and Exchange Broad of India


December 22, 2006

1. All Stock Exchanges

2.All Depositories and

3.  All Custodians of Securities.

Dear Sir / Madam,

Sub: Foreign investments in infrastructure companies in securities markets.

1.  The Government of India has decided to have the following policy regarding foreign investments in infrastructure companies in the securities markets, namely stock exchanges, depositories and clearing corporations:

a) Foreign investment upto 49% will be allowed in these companies with a separate Foreign Direct Investment (FDI) cap of 26% and Foreign Institutional Investment (FII) cap of 23%;

b)  FDI will be allowed with specific prior approval of FIPB;

c) FII will be allowed only through purchases in the secondary market;

d) FII shall not seek and will not get representation on the Board of Directors;

e) No foreign investor, including persons acting in concert, will hold more than 5% of the equity in these companies.

2. Necessary amendments to the respective regulations are being issued separately by SEBI and RBI in this regard.

3.  The aforesaid limits for foreign investment in respect of recognised stock exchanges shall be subject to the limit of 5% shareholding by any person, directly or indirectly, as prescribed under the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006.

4.This circular is being issued for information and necessary compliance by the concerned entities.

Yours faithfully,


Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *