More Entities permitted to issue debt securities under the IFSC Guidelines

The Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015 (“Guidelines”), have been formulated with a view to facilitate and regulate financial services relating to securities market in an International Financial Services Centre set up under the Special Economic Zones Act, 2005.

Under the Guidelines, a company incorporated in India and a company incorporated in a foreign jurisdiction are eligible to issue debt securities.

SEBI has now amended the definition of Issuer, pursuant to its notification dated November 14, 2017, to mean:

  • any entity incorporated in India seeking to raise capital in foreign currency other than Indian rupee which has obtained requisite approval under Foreign Exchange Management Act, 1999 (FEMA), or exchange control regulations as may be applicable; or
  • an entity incorporated in a foreign jurisdiction, provided such entity is permitted to issue securities outside the country of its incorporation or establishment or place of business as per the laws and regulations of its country of incorporation, jurisdiction or its constitution; or
  • any supranational, multilateral or statutory organization/institution/agency provided such organization/institution/agency is permitted to issue securities as per its constitution.