Nse Likely To Permit Cis Compaies Listing

NSE officials said, "We are planing to allow listing of CIS units, but only for selective schemes." NSE will soon take a final decision on what type of units could be listed on the exchange before making the necessary changes in the listing agreement and incorporate changes in the by-laws of the exchange.

They said that NSE is quite cautious on this issue as there are many fly-by-night operators and is making stringent listing norms.

Sources said the exchange is examining the listing rules notified by the government before taking a final decision.

The government has allowed listing of CIS on various stock exchanges and stipulated that companies that offer minimum of 25 per cent units of the scheme to the public are eligible for listing.

 

According to a recent notification, collective investment management company, which wants to get its scheme listed on the bourses, will have to provide details including a brief history of the company since incorporation.

Schemes through which instruments such as agro bonds, plantation bonds are issued would be treated as CIS. Analysts said the move was aimed at giving liquidity to the CIS, allowing unit holders to exit or enter the scheme via the secondary markets.

Till now, instruments such as shares, debentures, bonds among others are allowed to be listed on the stock exchanges.

The notification said the 25 per cent offered to the public would not include central government or state government or institutions like IDBI, ICICI, IFCI, LIC, UTI, and GIC and its subsidiaries.

The company should also provide a statement showing return and cash bonuses paid during the last ten years or for a shorter period.

The government had earlier brought entities which issue instruments like agro bonds, plantation bonds etc under the regulatory purview of the Securities and Exchange Board of India. Such entities were to be treated as "Collective Investment Schemes" coming under the provisions of Sec.11(2)c of the Sebi Act and Sebi later issued guidelines for CIS based on the Dave committee report set up by the market regulator.

Sebi has details of 460 entities who were mobilising funds under collective investment schemes. It also undertakes a special audit of those Collective Investment Schemes which had mobilised over Rs 5 crores from public.