RBI/2014-15/197
A.P. (DIR Series) Circular No.22
August 28, 2014
To
All Category – I Authorised Dealer Banks
Madam/ Sir,
Purchase and sale of securities other than shares or convertible
debentures of an Indian company by a person resident outside India
Attention of Authorized Dealer Category-I (AD Category-I) banks is
invited to Schedule 5 to the Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident outside India) Regulations, 2000 (the Principal
Regulations) notified vide
Notification No. FEMA.20/2000-RB dated May 3, 2000,
as amended from time to time, in terms of which, eligible investors, viz., SEBI
registered Foreign Institutional Investors (FIIs), Qualified Foreign Investors
(QFIs), registered Foreign Portfolio Investors (RFPIs) and long term investors
registered with SEBI, may purchase eligible government securities directly from
the issuer of such securities or through registered stock broker on a recognised
Stock Exchange in India, subject to such terms and conditions as mentioned
therein and limits as prescribed for the same by RBI and SEBI from time to time.
- With a view to providing flexibility in regard to the manner in which
government securities can be acquired by eligible investors, it has now been
decided to remove any stipulation as to the manner of acquisition from the said
Regulations. Consequently, the eligible investors can acquire such securities in
any manner as per the prevalent/approved market practice.
- AD Category - I banks may bring the contents of this circular to the notice
of their constituents and customers.
- Reserve Bank has since amended the Principal Regulations through the Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident outside
India) (Eleventh Amendment) Regulations, 2014 notified vide
Notification No.
FEMA. 313/2014-RB dated July 2, 2014 c.f. G.S.R. No.487 (E) dated July 11, 2014.
- 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.
Yours faithfully,
(B.P. Kanungo)
Principal Chief General Manager