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Acquisition of Foreign Securities by Resident Individual under ESOP
Scheme
A.P.
(DIR Series) Circular No. 68 dated 13th January 2003
Attention
of authorised dealers is invited to the Regulation 19 of Notification No. FEMA
19/2000-RB dated May 3, 2000 and AP (DIR Series) Circular No. 32 dated April 28,
2001 read with A.P. (DIR Series) Circular No.16 dated December 15, 2001 in terms
of which a resident individual, who is an employee or a director of an Indian
Office or branch of a foreign company or of a subsidiary in India of a foreign
company or of an Indian company, is permitted to remit upto USD 20,000 in a
calendar year for purchase of equity shares offered by the said foreign company
under Employees Stock Option (ESOP) Scheme.
2.
It has now been decided to remove the limit of USD 20,000 for purchase of
foreign securities by resident individual. Accordingly, remittances for the
acquisition of foreign securities under ESOP Scheme may be permitted by
authorised dealers as per the terms of offer without any monetary limit. The
other conditions as indicated below remain unchanged:
(i)
The shares under ESOP should be offered at the concessional price.
(ii)
The foreign equity holding in the Indian company should not be less than
51 per cent.
3.
The above relaxations, subject to review, shall be effective for a period
upto June 30, 2003.
4.
Necessary amendments to the Foreign Exchange Management Regulations, 2000
are being issued separately.
5.
Authorised dealers may bring the contents of the circular to the notice
of their constituents concerned.
6.
The directions contained in this circular have been issued under Section
10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of
1999).
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