New Delhi, Aug 20 (UNI) The Centre today directed the commodity exchanges to strictly abide by the direct foreign investment limit of 49 per cent and should divest their extra foreign equity holding by June 30, 2009.
According to an official release issued here today, the guidelines for foreign investment in commodity exchanges, a composite ceiling of 49 per cent was allowed, comprising 23 per cent under Portfolio Investment Scheme and 26 per cent under FDI Scheme.
However, some of the existing commodity bourses had foreign investment above the permitted level and this has come to the notice of the Government.
The commodity exchanges will be required to divest foreign equity equal to the amount by which the cap was being exceeded.
These exchanges have been allowed a transition, complying and correction time till June 30, 2009, to comply with the guidelines.
The release further said that commodity exchanges would have to submit compliance report on foreign investment and details of equity structure to the Department of Industrial Policy and Promotion, Department of Consumer Affairs, Foreign Investment Promotion Board, the Forward Market Commission (FMC) and Securities and Exchange Board of India (SEBI).
The non-compliance will be a violation under Foreign Exchange Management Act, 1999, the release added.
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