SUBSCRIBE(free)-Daily Updates (Click Verification Link Received in Your Email)

FDI in Infrastructure Company in the Securities Market in India

Sectoral Caps - FDI in Infrastructure Company in the Securities Market

Sector/Activity
% of Equity/ FDI Cap
Entry Route
Infrastructure companies in Securities Markets, namely, stock exchanges, commodity exchanges, depositories and clearing corporations, in compliance with SEBI Regulations
49%
Automatic


Other Conditions

(i) FII/FPI can invest only through purchases in the secondary market.
(ii) No non-resident investor/entity, including persons acting in concert, will hold more than 5% of the equity in commodity exchanges.
(iii) Foreign investment in commodity exchanges will be subject to the guidelines of the Central Government/SEBI from time to time.


Definitions:

(1) Futures trading in commodities are regulated under the Forward Contracts (Regulation) Act, 1952. Commodity Exchanges, like Stock Exchanges, are infrastructure companies in the commodity futures market. With a view to infuse globally acceptable best practices, modern management skills and latest technology, it was decided to allow foreign investment in Commodity Exchanges.

(2) For the purposes of this chapter,
(i)“Commodity Exchange” is a recognized association under the provisions of the Forward Contracts (Regulation) Act, 1952, as amended from time to time, to provide exchange platform for trading in forward contracts in commodities.
(ii) “recognized association” means an association to which recognition for the time being has been granted by the Central Government under Section 6 of the Forward Contracts (Regulation) Act, 1952
(iii)“Association” means any-body of individuals, whether incorporated or not, constituted for the purposes of regulating and controlling the business of the sale or purchase of any goods and commodity derivative.
(iv)“Forward contract” means a contract for the delivery of goods and which is not a ready delivery contract.
(v) “Commodity derivative” means-
  • a contract for delivery of goods, which is not a ready delivery contract; or
  • a contract for differences which derives its value from prices or indices of prices of such underlying goods or activities, services, rights, interests and events, as may be notified in consultation with SEBI by the Central Government, but does not include securities.



Reference: Clause 5.2.21 of the Consolidated FDI Policy Circular of 2016 (D/o IPP F. No. 5(1)/2016-FC-1 Dated the June 07, 2016) issued by Department of Industrial Policy & Promotion, Ministry of Commerce & Industry, Government of India.
Submit/See Comments With: or

No comments:

Post a Comment