Depository Receipts Scheme 2014 Allows Security Transfer to Foreign
Depositories
[RBI
Circular No. 61 dated 22nd January 2015]
Sub:
Depository Receipts Scheme.
Attention
of Authorised Dealer Category – I (AD Category-I) banks is invited to the Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident outside
India) Regulations, 2000 (the Principal Regulations) notified by the Reserve
Bank vide Notification No. FEMA. 20/2000-RB dated 3rd
May 2000, as amended from time to time.
2. A new scheme
called ‘Depository Receipts Scheme, 2014’ (DR Scheme, 2014) for investments
under ADR/GDR have been notified by the Central Government effective from
December 15, 2014 which provides for repeal of extant guidelines for Foreign
Currency Convertible Bonds and Ordinary Shares (Through Depositary Receipt
Mechanism) Scheme, 1993 except to the extent relating to foreign currency
convertible bonds.
3. The salient
features of the new scheme are:
· The
securities in which a person resident outside India is allowed to invest under
Schedule 1, 2, 2A, 3, 5 and 8 of Notification No. FEMA. 20/2000-RB dated 3rd
May 2000 shall be eligible securities for issue of Depository Receipts in terms
of DR Scheme 2014;
· A
person will be eligible to issue or transfer eligible securities to a foreign
depository for the purpose of issuance of depository receipts as provided in DR
Scheme 2014.
· The
aggregate of eligible securities which may be issued or transferred to foreign
depositories, along with eligible securities already held by persons resident
outside India, shall not exceed the limit on foreign holding of such eligible
securities under the extant FEMA regulations, as amended from time to time.
· The
eligible securities shall not be issued to a foreign depository for the purpose
of issuing depository receipts at a price less than the price applicable to a
corresponding mode of issue of such securities to domestic investors under
FEMA, 1999.
· It
is to be noted that if the issuance of the depository receipts adds to the
capital of a company, the issue of shares and utilisation of the proceeds shall
have to comply with the relevant conditions laid down in the Regulations framed
and Directions issued under FEMA, 1999.
· The
domestic custodian shall report the issue/transfer of sponsored/unsponsored
depository receipts as per DR Scheme 2014 in ‘Form DRR’ as given in Annex
within 30 days of close of the issue/ program.
4. AD Category -
I banks may bring the contents of the circular to the notice of their
customers/constituents concerned.
5. Reserve Bank
has since amended the Principal Regulations through the Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident outside India)
(Seventeenth Amendment) Regulations, 2014 notified vide Notification No.
FEMA.330/2014-RB dated December 15, 2014, c.f. G.S.R. No. 914(E) dated December
24, 2014.
6. 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.
Annex to A.P. (DIR Series)
Circular No.61 dt. January
22, 2015
Form DRR
Return
to be filed by the Domestic Custodian who has arranged issue/transfer of
Depository Receipts
Instructions:
The
Form should be completed and submitted by the Domestic Custodian to the Reserve
Bank of India, Foreign Exchange Department, Foreign Investment Division,
Central Office, Mumbai.
1. Name
of the Domestic Custodian:
2. Address
of the Domestic Custodian:
3. Details
of the Security:
4. Details
of the issuer of the security:
5. Activity
of the issuer of security (please give the NIC Code of the activity in which
the company is predominantly engaged)*:
6. Whether
sponsored or unsponsored:
7. If
sponsored, name and address of the sponsorer:
8. Name
and address of the Lead Manager/ Investment/Merchant Banker:
9. Name
and address of the Sub-Managers to the issue:
10. Details
of FIPB approval (If foreign investment in the company is subject to FIPB
approval):
11. Whether
any overall sectoral cap for foreign investment is
applicable. If yes, please give details.
12. If
the issue of DR increases the equity capital of the company or is sponsored by
the company:
|
Details of the Equity Capital |
Before Issue |
After Issue |
|
|
(a) |
Authorised Capital |
|
|
|
(b) |
Issued and Paid-up Capital |
|
|
|
(i) |
Held by persons Resident in India |
|
|
|
(ii) |
Held by foreign investors other than FIIs/NRIs/PIOs/
OCBs (a list of foreign investors holding more than 10 percent
of the paid-up capital and number of shares held by each of them should be
furnished) |
|
|
|
(iii) |
Held by NRIs/PIOs |
|
|
|
(iv) |
Held by FIIs/QFIs/registered FPIs |
|
|
|
|
Total Equity held by non-residents |
|
|
|
(c) |
Percentage of equity held by non-residents to total
paid-up capital |
|
|
|
(d) |
Details of repatriation/utilisation of the proceeds |
|
|
13. Number
of DRs issued:
14. Ratio
of DRs to underlying securities:
15. Whether
funds are kept abroad. If yes, name and address of the bank:
16. Whether
the DR is listed/traded on an International Exchange
or trading platform. If so, details of the exchange/trading platform.
Name
of Stock Exchange:
Date
of commencement of trading:
17. The
date on which DRs issue was launched:
Certified
that all the conditions laid down by Government of
India and Reserve Bank of India have been complied with.
*In
terms of AP (DIR Series) Circular No 5 dated July 17, 2014, NIC 2008 codes may
be reported
|
Sd/- |
Sd/- |