Listing Guidelines for Commercial Papers and Certificates of Deposit on IFSC Exchanges

OVERVIEW:
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International Financial Services Centres Authority (IFSCA) has issued a circular detailing the guidelines for listing Commercial Paper (CP) and Certificates of Deposit (CD) on recognized stock exchanges in the International Financial Services Centre (IFSC).
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The IFSCA (Listing) Regulations, 2024 provide the framework for listing securities and financial products on recognized stock exchanges in the IFSC.
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Under Regulations 80 and 81, Commercial Paper (CP) and Certificates of Deposit (CD) can be listed.
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This circular outlines the specific requirements for listing CP and CD on these exchanges.
COMMERCIAL PAPER (CP):
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Eligible Issuers: Issuers must comply with Chapter II of the Listing Regulations. However, Indian residents are restricted from issuing CP under the RBI’s External Commercial Borrowings framework.
Conditions for Issuance:
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CP must be issued in demat form and held with a recognized depository in the IFSC or an international central securities depository.
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The maturity period should be between 7 days and 1 year, denominated in a specified foreign currency.
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CP must be issued at a discount to face value, with no options (call/put), and cannot be underwritten or co-accepted.
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Eligible Investors: CP can be issued to Indian and foreign residents, subject to compliance with the Foreign Exchange Management Act, 1999.
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Listing Application: Issuers must submit a listing application with an offer document and a regulatory fee of USD 1,000. CP can be listed either as a standalone issue or in a series.
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Initial Disclosures:The offer document must provide material disclosures for informed investment decisions, including information about the issuer, financial statements, and any material litigations.
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Continuous Disclosures: Audited financial statements must be disclosed within three months after the financial year, and any material events must be reported immediately.
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Buyback: Buyback must occur at market price, offered equally to all investors, and not before 30 days from the issue date.
CERTIFICATES OF DEPOSIT (CD):
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Eligible Issuers: An IFSC Banking Unit licensed by the Authority is eligible to list its CD on a recognised stock exchange in the IFSC.
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Conditions for Issuance: CDs must also be in demat form and held with a recognised depository in the IFSC or an international central securities depository.
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Listing Application Process: Issuers desiring to list CDs must
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Submit a listing application along with the offer document or information memorandum to the recognised stock exchange.
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Pay a regulatory fee of USD 1,000, to be remitted to the Authority by the stock exchange.
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Initial Disclosures: Issuer should provide relevant details about the parent bank and any defaults.
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Continuous Disclosures: Issuers must disclose audited financials within three months of year-end and any material events within 24 hours.
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Buyback: Must occur at market price and be offered to all investors, with specific timing and extinguishing requirements.
CONCLUSION:
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The IFSCA (Listing) Regulations, 2024, along with the specific conditions outlined in the circular, provide a robust framework for listing Commercial Paper (CP) and Certificates of Deposit (CD) on IFSC-recognized exchanges.
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The circular further clarifies the listing requirements, including issuer eligibility, issuance conditions, and mandatory disclosures.
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It emphasizes the need for transparency, investor protection, and compliance with both domestic and international regulations.
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By establishing clear guidelines and procedures, the circular strengthens market integrity while promoting the growth of financial products within the IFSC, helping to solidify its position as a key global financial hub.