A Committee was constituted on 10th January, 2014 under the chairmanship of Shri. M.S. Sahoo, Secretary, Institute of Company Secretaries of India to review the entire framework of access to domestic and overseas capital markets and related aspects. The Committee has submitted its Report in respect of Indian Depository Receipts (IDRs) to Government of India in June, 2014.

The Committee suggested reforms in the framework of domestic depository receipts, within the overall capital control regime. The laws and regulations relating to market sand Indian institutional investors must be modified to ensure that there is a level playing field between an Indian security and a domestic DR in the eyes of all Indian institutional investors and they must be allowed, enabled and encouraged to reduce their portfolio risk through international diversification including investments in IDRs.

The Committee refers to the set of foreign securities accessible to Indian investors under the capital control regime as ‘permissible securities’. It refers to the DRs on the back of such permissible securities as “Bharat Depository Receipts (BhDRs)”. It also recommends to create two ‘levels’ of BhDRs with Level-I being restricted to sophisticated investors and Level-II being made available for all investors, including Indian retail investors.

Ministry of Finance would examine the Report in consultation with RBI & SEBI.

The copy of the report is placed in the public domain and may be accessed from the website of Ministry of Finance, Government of India (http://www.finmin.nic.in). Views/comments on the Report may be sent to Mr. Sanjeev Kaushik, Director (External Markets), Ministry of Finance at ([email protected]).

Bharat Depository Receipts expand investor access by introducing two levels of eligibility and regulatory review. The report proposes integrating foreign securities under the capital control regime as permissible securities and issuing corresponding Bharat Depository Receipts (BhDRs), with a two-tier structure-Level I for sophisticated investors and Level II open to all including retail-aimed at equalising treatment between domestic depository receipts and Indian securities; the Ministry of Finance will examine the recommendations in consultation with monetary and securities regulators and has invited public comments.