Indian corporates listed in the US bourses are increasingly buying Directors & Officers (D&O) Liability cover as a means of safeguarding themselves against the severity and size of litigation and settlement values.
This comes in the wake of the US Securities and Exchange Commission (SEC) becoming more watchful after the accounting scandals rocking the corporate world. Foreign equity issuers in the US market have become a major target of the SEC.
India is among the top 12 countries against whom the SEC has taken action. With SEC having tightened the noose around foreign issuers in the US, three large Indian corporates have already faced investigation by the US capital market watchdog.
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This has however, not deterred the issuers from tapping the US market. In fact, an increasing number of foreign issuers are raising capital in the US market. In the past four years, 230 private foreign issuers raised capital in the US as compared to 125 foreign issuers in the previous 25 years.