| Date: |
06-01-2001
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| Notification No: |
RBI A P D (Series)Circular No 24/2001
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
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| Subject: |
Foreign Exchange Management Act, 1999 - Investment in Indian Venture Capital Undertakings by registered Foreign Venture Capital Investors
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Foreign Exchange Management Act, 1999 - Investment in Indian Venture
Capital Undertakings by registered Foreign Venture Capital Investors
Attention
of authorised dealers is invited to �Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident outside India) Regulations, 2000 notified
under Notification No. FEMA 20/ 2000-RB dated 3rd May 2000. In terms
of Regulation 5 of the Notification, certain persons resident/ entities outside
India may purchase shares/ convertible debentures in Indian companies under
various Foreign Direct Investment Schemes such as Automatic Route, Government
Route, Foreign Institutional Investment etc. It has now been decided to permit
registered Foreign Venture Capital Investors to invest in Indian Venture Capital
Undertakings/ Venture Capital Funds in accordance with regulations framed
therefore. Accordingly, the Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident Outside India) Regulations, 2000, have been
amended vide Notification No. FEMA 32/ 2000-RB dated 26th December
2000 (copy enclosed) to include investments by Foreign Venture Capital
investors.
2.
Authorised Dealers may bring the contents of this circular to the notice
of their constituents concerned.
3.
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). Any Contravention or non-observance of these directions is subject to the
penalties prescribed under the Act.
Necessary
changes have been made in the above-said regulations.
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