·
The
Reserve Bank of India has notified the Foreign
Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026,
amending the existing 2018 regulations governing cross-border mergers and
amalgamations.
1. Definition of 'Competent Authority'
Introduced
·
A new
definition of "Competent
Authority" has been inserted.
·
It
refers to any authority empowered under the Companies Act, 2013 or related
subordinate legislation to approve a scheme of merger or amalgamation.
2. Definition of 'NCLT' Removed
·
The
existing definition relating to the National
Company Law Tribunal (NCLT) has been omitted from the
regulations.
3. References to NCLT Replaced
·
In
Regulations 4, 5, 7 and 9,
the term "NCLT"
has been replaced with "Competent
Authority" wherever it appears.
·
The
amendment broadens the scope of authorities that can approve cross-border
merger schemes, instead of restricting approvals solely to the National Company
Law Tribunal.
·
It
aligns the FEMA framework with the evolving regulatory architecture under the
Companies Act, 2013.
·
The
change provides greater flexibility for implementation of cross-border mergers
and amalgamations approved by any legally empowered authority.
·
The
amendments come into force from the date of their publication in the Official
Gazette.
The
amendment is primarily a procedural
and harmonization measure, replacing the specific reference to
the National Company Law Tribunal with the broader concept of a "Competent
Authority" to ensure consistency with the Companies Act framework
governing merger approvals.
[Notification
No. FEMA 389(1)/2026-RB dated May 29, 2026]
Foreign
Exchange Management (Cross Border Merger) (Amendment) Regulations, 2026
In exercise of the powers conferred by
section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the
Reserve Bank makes the following amendment in the Foreign Exchange Management
(Cross Border Merger) Regulations, 2018 (Notification No. FEMA.389/2018-RB dated March 20, 2018) (hereinafter referred
to as 'the Principal Regulations'), namely:-
1.
Short title and commencement:
(1) These regulations may be called the
Foreign Exchange Management (Cross Border Merger) (Amendment) Regulations,
2026.
(2) They shall come into force with
effect from the date of their publication in the Official Gazette.
2,
Amendment to regulation 2:
In the Principal Regulations, in
regulation 2, –
(i) the clause (vii) shall be omitted;
(ii) after the clause (ii), the following clause shall be inserted,
namely –
“(iia) ‘Competent Authority’ means any
authority empowered under the Companies Act, 2013 or any subordinate
legislation made thereunder to approve a scheme of merger or amalgamation;”.
3.
Amendment to regulations 4, 5, 7 and 9:
In the Principal Regulations, in
regulations 4, 5, 7 and 9 for the word “NCLT”, wherever it occurs, the words
“Competent Authority” shall be substituted.