Business Daily from THE HINDU group of publications
Friday, Aug 22, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Friday, Aug 22, 2008 ePaper | Mobile/PDA Version | Audio |
|
|
|
|
|
Agri-Biz & Commodities
-
Commodity Exchanges Web Extras - Outlook Deadline set for commodity exchanges to comply with foreign investment norms Our Bureau New Delhi, Aug. 21 In a clear signal to the commodity exchanges to get listed on the stock exchanges, the Government has set June 2009, as the deadline for all the 22 existing exchanges to comply with the revised foreign investment guidelines approved by the Cabinet in January this year and notified on March 12, 2008, through Press Note 2(2008). The move follows completion of corporatisation of the exchanges by incorporating them under the Companies Act. Commodity exchanges are permitted to have up to 49 per cent foreign investment, out of which 26 per cent is foreign direct investment and the remaining is foreign portfolio investment. Defining FDIThe equity allotted directly by the company is accounted for as FDI, while the equity acquired through secondary market operations is classified as portfolio investment. This January the Cabinet approved an increase in foreign investment in commodity exchanges from the then 26 per cent to 49 per cent — the additional 23 per cent as portfolio investment. But since none of these exchanges are listed on the stock exchanges, technically the portfolio investment was not possible. However, there had been several private transactions involving transfer of shares between two parties since Press Note 2 (2008), was issued in March. As these shares were neither directly allotted, nor acquired through exchange based transactions, their status remained hazy. Sources said that now the Government has decided to treat them as FDI.
In an official release issued here on Wednesday, the Department of Industrial Policy and Promotion (DIPP) said that it has been brought to the notice of the Government that some of the existing commodity exchanges had foreign investment above the permitted limit. In order to facilitate the existing exchanges to comply with the guidelines notified in March this year, it has been decided to allow a transition time and the exchanges will be required to divest the excess foreign holding. “All commodity exchanges shall furnish a compliance report informing the foreign investment in the exchange as on June 30, 2009, along with details of equity structure to the DIPP, Department of Consumer Affairs, Foreign Investment Promotion Board, Forward Market Commission and the Securities Exchange Board of India,” the DIPP said. “Non-compliance of the conditions of Press Note 2(2008) after June 30, 2009, would be a violation of the Foreign Exchange Management Act, 1999,” the release said. More Stories on : Commodity Exchanges | Overseas Investments | Outlook
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2008, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|
