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JC - Legal Updates - Relaxations for offering Foreign Securities in IFSC

Legal Updates

09 Aug 2021

Relaxations for offering Foreign Securities in IFSC

The Ministry of Corporate Affairs (“MCA”) vide its notification dated 5th August 2021 has amended the Companies Act, 2013 along with Companies (Registration of Foreign Companies Rules), 2014 and the Companies (Specification of Definition Details) Rules, 2014 (“Amendments”) to relax provisions relating to prospectus offering securities of [Foreign companies as well as companies incorporated or to be incorporated outside India (“Foreign Companies”) in International Financial Services Centres (“IFSCs”). In this regard:

1)   Foreign Companies are exempted from complying with Section 387 to 392 of the Companies Act, 2013 (“Act”), which deals with the manner in which a foreign prospectus can be circulated in India, if such Foreign Companies are offering subscription in securities etc. within the IFSCs.

2)   Further, any electronic based offering of securities, subscription or listing of securities in the IFSC will not fall under the ambit of electronic mode and as a result will not be governed as a Foreign Company in India, for that reason alone. Hence, Foreign Companies will be free to offer their securities in the IFSC without falling into the rigours of being registered as a foreign company in India, as provided under Chapter XXII of the Act.




For any further information, please contact Mr. Arunabh Choudhary (arunabh.choudhary@jclex.com) or Ms. Apurva Kanvinde (apurva.kanvinde@jclex.com).