Recently, Asia’s oldest bourse, Bombay Stock Exchange (BSE) has become the first Indian exchange to be designated as a “Designated Offshore Securities Market” (DOSM) by the United States Securities and Exchange Commission (SEC).
Only a few exchanges globally enjoy the DOSM recognition, some of the notable ones bengi London Stock Exchange, Bourse de Luxembourg, Tokyo Stock Exchange and Toronto Stock Exchange.
The DOSM status allows the sale of securities to US investors without registering such securities with the US SEC via trading venue of BSE, which eases the trading in India by US investors. The new status will primarily benefit securities issued in US private placements to institutional investors. And the availability of a liquid resale market will attract more US investors to BSE-listed companies. Also, Certain directors and officers of dual-listed companies will be permitted to resell their securities on BSE, regardless of any restrictions or holding periods that may apply under US securities laws.
Furthermore, the DOSM recognition will also draw US investors’ attention to Indian Depository Receipts (IDRs) while providing additional advantages to companies whose securities are traded on BSE and in the US. Incidentally, ever since the IRDs of Standard Chartered Plc on the Indian bourses in June 2010, no other foreign enterprise has issued IDRs to list in India.
During the press release, Ashishkumar, MD & CEO, BSE rightly said that this is a significant recognition of our endeavours not only to be the most modern platform technologically but also to provide a globally recognised, well-regulated and well-governed venue for global investors who are looking at India with even more interest. With this status, we will continue our growth of listings and also aim to become an even better place to enable investments in India by US investors.