In its Circular dated November 14, 2017 (“Circular”), SEBI has amended the guidelines for International Financial Services Centres (“IFSC”) wherein SEBI has introduced an amended definition of an ‘Issuer’ in the SEBI (IFSC) Guidelines, 2015 (“Guidelines”).
Previously, the definition of ‘Issuer’ referred to inter-alia “…a company incorporated in a foreign jurisdiction”. Hence, a company incorporated in a foreign jurisdiction could raise capital in India, irrespective of the domestic laws of its country of incorporation/establishment/place of business.
However, the new definition clarifies that only those foreign companies whose domestic laws of its country of incorporation/establishment/place of business allow them to issue securities to investors outside that country, would be considered as an ‘Issuer’ under the Guidelines.
As a result, the Circular has excluded foreign companies who are not allowed to issue securities outside the country according to their domestic laws from being an Issuer, thereby protecting the interests of investors.
The latest amendment also expands the definition of an ‘Issuer’ by specifying that any supranational, multilateral or statutory organization or institution or agency (who are permitted to issue securities as per their constitution), can also be an issuer.