NTF. NO. FEMA 88/2003-RB, DT. 01/04/2003

Direct Investment in Cos. Registered Overseas
Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Second Amendment) Regulations, 2003

G.S.R. 399 (E).-In exercise of the powers conferred by clause (a) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) and in partial modification of its Notification No. FEMA 19/RB-2000 dated May 3, 2000, the Reserve Bank of India makes the following Regulations to amend the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2000, as amended from time to time namely:–

1. Short title and commencement

(a) These Reglations may be called the Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Second Amendment) Regulations, 2003.

(b) They shall come into force from the date of their publication in the Official Gazette.

2. Amendment of the Regulation

In the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2003

(a) after Regulation 6, the following shall be inserted, namely:–

“6A. Permission for Direct Investment in Equity of Companies Registered Overseas

A person resident in India, being an individual or a listed Indian company or a mutual fund registered in India, may invest in the shares of an overseas company which is listed on a recognised stock exchange and has a share holding in its name of not less than 10% in any listed Indian company as on 1st January of the year of investment, provided that :–

(i) in the case of investment by the listed Indian company, the investment shall not exceed 25% of its net worth shown in its latest audited balance sheet;

(ii) in the case of investment by Mutual Fund, the investment shall not exceed the ceiling stipulated by Securities & Exchange Board of India (SEBI) from time to time;

(iii) every transaction relating to purchase and sale of shares of the overseas company shall be routed through the designated branch of an authorised dealer in India.”

Sd/-
K.J. Udeshi,
Executive Director

Foot-note :- The Principal Regulations were published in the Official Gazette vide No. G.S.R.456, dated May 3, 2000 in Part II, Section 3, sub-section (i) and subsequently last amended vide G.S.R. No. 629(E) dated March 1, 2003.

(Above Foot Note has been added vide Corrigendum G.S.R. 189(E)-RB, DT. 05/03/2004)

(Please refer Cir. No. 08/2003-04-RB, Dt. 16/08/2003)

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