RBI Allows Purchase and Sale of Shares and Debentures of Indian
Company by a Person Resident Outside India
[RBI
Circular No. 23 dated 27th December 2016]
Sub:
Purchase and sale of securities other than shares or convertible debentures of
an Indian company by a person resident outside India.
Attention
of Authorized Dealer Category-I (AD Category-I) banks is invited to Schedule 5
to the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) Regulations, 2000 (the Principal Regulations) notified
vide Notification No. FEMA.20/2000-RB dated May 3, 2000, as amended from time
to time, in terms of which, eligible investors, viz., SEBI registered Foreign
Institutional Investors (FIIs), Qualified Foreign Investors (QFIs), registered
Foreign Portfolio Investors (FPIs) and long term investors registered with
SEBI, may purchase securities indicated in Schedule 5 on repatriation basis and
subject to such terms and conditions as may be specified by the SEBI and the
Reserve Bank from time to time.
2. With a view to
providing flexibility in regard to the manner in which non-convertible
debentures/bonds issued by Indian companies can be acquired by FPIs, it has now
been decided to allow them to transact in such instruments either directly or
in any manner as per the prevalent/approved market practice.
3. AD
Category - I banks may bring the contents of this circular to the notice of
their constituents and customers.
4. The
directions contained in this circular have been issued under sections 10(4) and
11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions / approvals, if any, required under any other law.