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With reference to the Depository Receipts (DRs), consider the following statements:
1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).
2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
With reference to the Depository Receipts (DRs), consider the followin...
The International Financial Services Centres Authority (IFSCA), with an objective to develop the financial products and financial services in the Gujarat International Finance Tec-City International Financial Services Centre (GIFT IFSC) has prescribed the regulatory framework for listing of Depository Receipts (DRs).
- The framework provides for listing of DRs by companies that are listed in FATF compliant jurisdictions (including India). The framework enables the eligible listed companies to raise capital through issuance and listing of DRs on the stock exchanges in GIFT IFSC.
- Additionally, the framework enables eligible companies having DRs listed on any exchange in a FATF compliant jurisdiction to list and trade such DRs on the stock exchange(s) in GIFT IFSC as an additional venue for trading, without any fresh public offering.
- A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).
- The framework comes after Finance Minister Nirmala Sitharaman in August said that the markets regulator would soon implement the Depository Receipt Scheme 2014. The liberalised norms for DRs were issued in 2014 but could not be implemented due to concerns raised by Sebi.
- This will give Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).
Hence both statements are correct.
Most Upvoted Answer
With reference to the Depository Receipts (DRs), consider the followin...
Statement 1: A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).
This statement is correct. A depository receipt (DR) is a negotiable financial instrument denominated in a foreign currency. It represents a certain number of shares of a foreign company and is listed on an international exchange. DRs are issued by a foreign depository to a domestic custodian. One type of depository receipt is a Global Depository Receipt (GDR), which is issued by a foreign depository bank representing shares of a foreign company and traded on an international exchange.
Statement 2: The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).
This statement is also correct. The Securities and Exchange Board of India (SEBI) introduced a new regulatory framework in 2019 for the listing of Depository Receipts (DRs) by Indian companies. This framework allows Indian companies to raise capital through the issuance of American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) on international exchanges. ADRs and GDRs are popular instruments used by companies to raise funds from foreign investors.
The new regulatory framework aims to provide Indian companies with increased access to foreign funds and broaden their investor base. It allows Indian companies to directly list their DRs on international exchanges without the need for prior or simultaneous listing in India. This enables Indian companies to tap into global capital markets and attract foreign investment.
Therefore, both statements are correct. A depository receipt is a foreign currency denominated instrument listed on an international exchange, and the new regulatory framework for listing of Depository Receipts (DRs) provides Indian companies increased access to foreign funds through ADRs/GDRs.
This statement is correct. A depository receipt (DR) is a negotiable financial instrument denominated in a foreign currency. It represents a certain number of shares of a foreign company and is listed on an international exchange. DRs are issued by a foreign depository to a domestic custodian. One type of depository receipt is a Global Depository Receipt (GDR), which is issued by a foreign depository bank representing shares of a foreign company and traded on an international exchange.
Statement 2: The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).
This statement is also correct. The Securities and Exchange Board of India (SEBI) introduced a new regulatory framework in 2019 for the listing of Depository Receipts (DRs) by Indian companies. This framework allows Indian companies to raise capital through the issuance of American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) on international exchanges. ADRs and GDRs are popular instruments used by companies to raise funds from foreign investors.
The new regulatory framework aims to provide Indian companies with increased access to foreign funds and broaden their investor base. It allows Indian companies to directly list their DRs on international exchanges without the need for prior or simultaneous listing in India. This enables Indian companies to tap into global capital markets and attract foreign investment.
Therefore, both statements are correct. A depository receipt is a foreign currency denominated instrument listed on an international exchange, and the new regulatory framework for listing of Depository Receipts (DRs) provides Indian companies increased access to foreign funds through ADRs/GDRs.
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With reference to the Depository Receipts (DRs), consider the following statements:1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?
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With reference to the Depository Receipts (DRs), consider the following statements:1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to the Depository Receipts (DRs), consider the following statements:1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Depository Receipts (DRs), consider the following statements:1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
With reference to the Depository Receipts (DRs), consider the following statements:1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about With reference to the Depository Receipts (DRs), consider the following statements:1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for With reference to the Depository Receipts (DRs), consider the following statements:1. A depository receipt is a foreign currency denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).2. The new regulatory framework for listing of Depository Receipts (DRs) will provide Indian companies increased access to foreign funds through American Depository Receipt (ADR)/ Global Depository Receipt (GDR).Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'C'. Can you explain this answer?.
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