SEBI RESERVES 20% RESERVATION FOR RETAIL INVESTORS IN IDR REDEMPTIONS

Market regulator Securities and Exchange Board of India (SEBI) has said that reservation of 20 per cent will have to be made for retail investors during conversion of Indian Depository Receipts (IDRs) into underlying shares. Current regulations allow partial fungibility of such instruments - in a financial year conversion to the extent of 25% of the IDRs originally issued is permitted. The issuer can either give the option of converting IDRs into underlying shares or selling the underlying shares in the foreign market or both to the IDR holders. The periodicity for fungibility has been fixed at least once every quarter and the window would be open for at least seven days.