Commodity bourses get 6 more months to comply with foreign investment norms
30 Sep 2009
The government has extended the deadline for commodity exchanges to comply with the foreign investment regulations from 30 September 2009 by another six months to 31 March 2010.
A government press note issued today said this has been done to facilitate the existing commodity exchanges to comply with the guidelines notified vide Press Note 2(2008).
The government had announced guidelines for foreign investment in commodity exchanges as far back as 12 March 2008.
As per the guidelines, a composite ceiling for foreign investment of 49 per cent was allowed with prior government approval, subject to the condition that investment under the Portfolio Investment Scheme will be limited to 23 per cent and that under the FDI scheme will be limited to 26 per cent. Further, no foreign investor/entity, including persons acting in concert, will hold more than 5 per cent of the equity in these companies.
The release noted that some of the existing commodity exchanges had foreign investment above the permitted level, as on the date of issue of the guidelines and, consequently, these exchanges would be required to divest foreign equity, equal to the amount by which the cap was being exceeded, in accordance with the guidelines.
Commodity bourses which had already exceeded FDI limit had brought to the notice of the government difficulties in complying with the FDI norms within the stipulated time frame.
