The IFSCA Listing Regulations, 2024 provide a comprehensive regulatory framework governing the listing of securities on recognized stock exchanges within the International Financial Services Centres (IFSCs) in India. These regulations focus on enabling both Indian and foreign issuers to access capital markets in a streamlined, transparent, and efficient manner. Below is a detailed summary of the key aspects of the regulations:
1. Purpose and Scope
The regulations are designed to promote the listing of various financial products, such as equity and debt securities, depository receipts, and convertible securities on IFSC exchanges. The primary goal is to provide issuers with greater flexibility while ensuring that the interests of investors are protected through rigorous disclosure and governance requirements.
2. Key Financial Products Covered
The regulations cover a broad range of financial instruments, including:
- Equity Shares: Companies can issue and list equity shares, providing a new avenue for capital raising.
- Debt Securities: Non-convertible debt instruments like debentures, bonds, and commercial papers can be listed. This includes sustainability-linked debt securities, which require additional ESG (Environmental, Social, and Governance) disclosures(
- Depository Receipts (DRs): These instruments represent underlying securities of an issuer in another jurisdiction, providing a global dimension to the IFSC listings
- Convertible Securities: These include instruments that can be converted into equity at a later stage, such as convertible debt instruments or preference shares
3. Emphasis on Sustainability
One of the standout features of the 2024 regulations is the focus on sustainability. Issuers of sustainability-linked debt securities must submit performance indicators related to their ESG objectives. Independent verification of these reports is required, enhancing the credibility of the sustainability claims. Companies are expected to file a Sustainability Report within six months of the end of the financial year.
4. Disclosure and Governance Requirements
The regulations place strong emphasis on corporate governance and transparency. Issuers must ensure:
- Timely Disclosure: Any material or price-sensitive information must be disclosed immediately. This helps in maintaining market integrity and protecting investors from asymmetric information(
- Financial Reporting: Annual financial statements must be submitted within three months, and the full annual report must be provided within six months of the financial year-end(
- Whistleblower Mechanism: A whistleblower policy must be in place to allow employees or stakeholders to report unethical practices.
5. Capital Market Efficiency
The regulations aim to create a robust and vibrant primary market in IFSCs, benefiting Indian and foreign issuers. By simplifying the listing process and introducing more flexible options for raising capital, the regulations are expected to attract international businesses and investors. This initiative will promote capital raising for companies operating in sectors like banking, insurance, asset management, and more(
6. International Compatibility
IFSCA ensures that the listed securities in IFSC are compatible with international standards. For instance, foreign jurisdictions recognized by the International Organization of Securities Commissions (IOSCO) are eligible for listings. The regulations also comply with anti-money laundering and combating financing terrorism (AML/CFT) norms as per Financial Action Task Force (FATF) guidelines.
7. Investor Protection
The regulations focus on safeguarding the interests of investors. Issuers are required to disclose all relevant information that could impact investor decision-making. The regulatory framework ensures that capital raising is conducted in a fair, orderly, and transparent manner. The emphasis on timely disclosure and corporate governance builds confidence among investors(
Conclusion
The IFSCA Listing Regulations, 2024, mark a significant step towards making India’s IFSCs a global financial hub. By facilitating the listing of a variety of financial instruments and integrating global best practices, the regulations create an efficient marketplace for both issuers and investors. These rules are expected to stimulate primary market growth in IFSCs and enhance the ease of doing business for companies looking to raise capital. The framework is set to attract more international companies and help Indian companies access global capital, making IFSCs a key player in the global financial system
