Reserve Bank of India
Foreign Exchange Department
Central Office
Mumbai- 400 001
Notification No. FEMA. 344/2015 RB
Dated June 11, 2015
Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) (Fourth Amendment) Regulations, 2015
In exercise of the powers conferred by clause (b) of sub-section (3) of Section
6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the
Reserve Bank of India hereby makes the following amendments in the Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident outside
India) Regulations, 2000 (Notification No. FEMA 20/2000-RB dated 3rd May 2000)
namely:-
1. Short Title & Commencement:-
These Regulations may be called the Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident outside India) (Fourth Amendment)
Regulations, 2015.
They shall come into force from the date of its publication in the Official
Gazette.
2. Amendment of the Regulations:-
In the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) Regulations, 2000 (Notification No. FEMA 20/2000-RB
dated 3rd May 2000),
I. In Regulation 2:
a. after clause (iie), the following new clause shall be added, namely:-
‘(iif) “employees’ stock option” means the option given to the directors,
officers or employees of a company or of its holding company or joint venture or
wholly owned overseas subsidiary/subsidiaries, if any, which gives such
directors, officers or employees, the benefit or right to purchase, or to
subscribe for, the shares of the company at a future date at a pre-determined
price;’
b. after clause (x), the following new clause shall be added, namely :-
“(xa) “sweat equity shares” means such equity shares as issued by a company to
its directors or employees at a discount or for consideration other than cash,
for providing their know-how or making available rights in the nature of
intellectual property rights or value additions, by whatever name called;”
II. For the existing Regulation 8, the following shall be substituted, namely :
“(1) An Indian company may issue “employees’ stock option” and/or “sweat equity
shares” to its employees/directors or employees/directors of its holding company
or joint venture or wholly owned overseas subsidiary/subsidiaries who are
resident outside India, provided that :
- The scheme has been drawn either in terms of regulations issued under the
Securities Exchange Board of India Act, 1992 or the Companies (Share Capital and
Debentures) Rules, 2014 notified by the Central Government under the Companies
Act 2013, as the case may be.
- The “employee’s stock option”/sweat equity shares issued to non-resident
employees/directors under the applicable rules/regulations are in compliance
with the sectoral cap applicable to the said company.
- Issue of “employee’s stock option”/sweat equity shares in a company where
foreign investment is under the approval route shall require prior approval of
the Foreign Investment Promotion Board (FIPB) of Government of India.
- Issue of “employee’s stock option”/sweat equity shares under the applicable
rules/regulations to an employee/director who is a citizen of
Bangladesh/Pakistan shall require prior approval of the Foreign Investment
Promotion Board (FIPB) of Government of India.
(2) The Reserve Bank may require the company issuing “employees’ stock option”
and/or “sweat equity shares” to submit such reports and at such frequency as it
may consider necessary.
(B.P. Kanungo)
Principal Chief General Manager
Foot Note:-
The Principal Regulations were published in the Official Gazette vide G.S.R.
No.406 (E) dated May 8, 2000 in Part II, Section 3, sub-Section (i) and
subsequently amended as under:-
G.S.R.No. 158(E) dated 02.03.2001
G.S.R.No. 175(E) dated 13.03.2001
G.S.R.No. 182(E) dated 14.03.2001
G.S.R.No. 4(E) dated 02.01.2002
G.S.R.No. 574(E) dated 19.08.2002
G.S.R.No. 223(E) dated 18.03.2003
G.S.R.No. 225(E) dated 18.03.2003
G.S.R.No. 558(E) dated 22.07.2003
G.S.R.No. 835(E) dated 23.10.2003
G.S.R.No. 899(E) dated 22.11.2003
G.S.R.No. 12(E) dated 07.01.2004
G.S.R.No. 278(E) dated 23.04.2004
G.S.R.No. 454(E) dated 16.07.2004
G.S.R.No. 625(E) dated 21.09.2004
G.S.R.No. 799(E) dated 08.12.2004
G.S.R.No. 201(E) dated 01.04.2005
G.S.R.No. 202(E) dated 01.04.2005
G.S.R.No. 504(E) dated 25.07.2005
G.S.R.No. 505(E) dated 25.07.2005
G.S.R.No. 513(E) dated 29.07.2005
G.S.R.No. 738(E) dated 22.12.2005
G.S.R.No. 29(E) dated 19.01.2006
G.S.R.No. 413(E) dated 11.07.2006
G.S.R.No. 712(E) dated 14.11.2007
G.S.R.No. 713(E) dated 14.11.2007
G.S.R.No. 737(E) dated 29.11.2007
G.S.R.No. 575(E) dated 05.08.2008
G.S.R.No. 896(E) dated 30.12.2008
G.S.R.No. 851(E) dated 01.12.2009
G.S.R.No. 341 (E) dated 21.04.2010
G.S.R.No. 821 (E) dated 10.11.2012
G.S.R.No. 606(E) dated 03.08.2012
G.S.R.No. 795(E) dated 30.10.2012
G.S.R.No. 796(E) dated 30.10.2012
G.S.R. No. 797(E) dated 30.10.2012
G.S.R.No. 945 (E) dated 31.12.2012
G.S.R. No.946(E) dated 31.12.2012
G.S.R. No.38(E) dated 22.01.2013
G.S.R.No.515(E) dated 30.07.2013
G.S.R.No.532(E) dated 05.08.2013
G.S.R. No.341(E) dated 28.05.2013
G.S.R.No.344(E) dated 29.05.2013
G.S.R. No.195(E) dated 01.04.2013
G.S.R.No.393(E) dated 21.06.2013
G.S.R.No.591(E) dated 04.09.2013
G.S.R.No.596(E) dated 06.09.2013
G.S.R.No.597(E) dated 06.09.2013
G.S.R.No.681(E) dated 11.10.2013
G.S.R.No.682(E) dated 11.10.2013
G.S.R. No.818(E) dated 31.12.2013
G.S.R. No.805(E) dated 30.12.2013
G.S.R.No.683(E) dated 11.10.2013
G.S.R.No.189(E) dated 19.03.2014
G.S.R.No.190(E) dated 19.03.2014
G.S.R.No.270(E) dated 07.04.2014
G.S.R.No. 361 (E) dated 27.05.2014
G.S.R.No.370(E) dated 30.05.2014
G.S.R.No.371(E) dated 30.05.2014
G.S.R.No. 435 (E) dated 08.07.2014
G.S.R.No. 400 (E) dated 12.06.2014
G.S.R.No. 436 (E) dated 08.07.2014
G.S.R.No. 487 (E) dated 11.07.2014
G.S.R.No. 632 (E) dated 02.09.2014
G.S.R.No. 798 (E) dated 13.11.2014
G.S.R.No. 799 (E) dated 13.11.2014
G.S.R.No. 800 (E) dated 13.11.2014
G.S.R.No. 829 (E) dated 21.11.2014
G.S.R.No. 906(E) dated 22.12.2014
G.S.R.No. 914 (E) dated 24.12.2014
G.S.R.No. 30 (E) dated 14.01.2015
G.S.R.No. 183 (E) dated 12.03.2015
Published in the Official Gazette of Government of India – Extraordinary –
Part-II, Section 3, Sub-Section (i) dated 11.06.2015- G.S.R.No.484(E)
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