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The Sahoo Panel has submitted its report on external commercial borrowings (ECBs), recommending that Government should step in to regulate such instruments only when there is likelihood of any market failure.
Also, regulation must only be to that extent as necessary to address market failures and not beyond, sources privy to the Panel's recommendations said.
When contacted, M.S.Sahoo, former SEBI wholetime member and head of the Panel, confirmed that he had submitted the report on ECBs to the Finance Ministry recently.
“The latest report on ECB is continuation of the philosophy of the earlier reports—one on ADRs/GDRs and the other on IDRs/Bharat Depository Receipts”, Sahoo told Business Line.
This is the third in the series of reports submitted by the M.S.Sahoo Committee, which was initially set up by the erstwhile UPA Government to undertake a comprehensive review of the depository receipt mechanism scheme put in place in 1993.
The terms of reference of this committee was later expanded to review the framework on external commercial borrowings and foreign currency convertible bonds.
Based on the recommendations of Sahoo Panel’s earlier two reports, the Centre had completely revamped the depository receipt framework in India.
The depository receipt window has now been thrown wide open with Indian companies allowed to issue depository receipts in overseas markets against any underlying security—equity or debt, by any issuer—listed or listed.
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