Govt plans to boost financial markets, revamp ADR, GDR scheme

To deepen financial markets, the government today proposed to overhaul the norms governing issuance of foreign-listed securities by Indian firms and said steps would be taken to boost corporate bond and currency derivative segments.
The government would "comprehensively revamp the American depository receipt (ADR) and global depository receipt (GDR) scheme and enlarge the scope of depository receipts," Finance Minister P Chidambaram said in his interim budget speech.
Besides, the government would take a number of steps to energise and deepen the country's corporate bond as well as currency derivatives market.
The incentives are primarily meant for attracting retail and high-net worth (HNI) investors towards this segment and are aimed at helping India Inc raise long-term funds in a cost-effective manner.

Though India has a very advanced G-sec (government securities) market, the corporate bond market is relatively under-developed.
Corporate bonds are debt securities issued by private and public corporations. Companies issue corporate bonds to raise money for a variety of purposes, such as building a new plant, purchasing equipment, or growing business.

Chidambaram said the government would "enable smoother clearing and settlement for international investors looking to invest in Indian bonds."
He stated that steps would be taken to strengthen the currency derivatives market enabling Indian companies to fully hedge against foreign currency risks.
The government and capital market regulator Sebi have taken some steps to check speculation in the currency market.

The Finance Minister said the government would create "one record for all financial assets of every individual.