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SEBI constitutes Group to review Institutional Trading Platform (ITP) - (12 Jun 2018)

Capital Market

The Securities and Exchange Board of India (SEBI) has constituted a group to look into the existing Institutional Trading Platform (ITP) framework. SEBI had notified the ITP framework in 2015 with a view to facilitating listing of new age companies in sectors like e-commerce, data analytics, bio-technology and other startups and to attract both investors and investees interested in the relevant market. The framework was introduced to facilitate listing of companies without necessarily doing an initial public offer of equity. However, this framework failed to gain any traction. ITP plays a significant role in facilitating capital raising by small and medium enterprises including start-up companies which are in their early stages of growth and to provide better visibility and wider investor base.

The group is formed primarily with the aim to review the need for present ITP framework in the current context. Further, to revisit the current ITP framework and identify the areas, if any, which require further changes. The members of the group include representatives from the Indian Software Product Industry Round Table (iSPIRT), The Indus Entrepreneurs (TIE), the Indian Private Equity and Venture Capital Association (IVCA), law firms, merchant bankers, and stock exchanges. The group shall endeavour to submit the report to SEBI within a period of one month.

Further, Expert Committee is also formed for listing of equity share capital of companies incorporated in India on foreign exchanges and vice versa. At present, direct listing of equity share capital of companies incorporated in India is not permitted on foreign exchanges and vice versa. In view of evolution and globalisation of the Capital Markets, it is necessary for companies incorporated in India to directly list their equity share capital abroad and vice versa. Companies incorporated in India can today list their debt securities on international exchanges (Masala Bonds) but their equity share capital can be listed abroad only through the ADR / GDR route. Similarly, companies incorporated outside India can access the Indian capital markets only through the Indian Depository Receipt (IDR) route.

The terms of reference of the Committee would be to examine in detail the economic base for permitting direct listing of Indian companies overseas and vice versa; examine various legal, operational and regulatory constraints in facilitating companies incorporated in India to directly list their equity share capital abroad and vice versa; and make recommendations for a suitable framework to facilitate such direct listing. The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992. The basic functions of the Securities and Exchange Board of India is to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto.

Tags : ITP   REVIEW   COMMITTEE   CONSTITUTION  

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