| Date: |
16-07-2015
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| Notification No: |
RBI/2015-16/131 A.P.(DIR Series) Circular No.6
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| Issuing Authority: |
RBI
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| Type: |
A.P.D.(Series) Circulars
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| File No: |
RBI/2015-16/131 |
| Subject: |
Foreign Investment in India by Foreign Portfolio Investors
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RBI/2015-16/131
A.P.(DIR Series) Circular No. 6
July 16, 2015
To,
All Authorised Persons
Madam/ Sir,
Foreign Investment in India by Foreign Portfolio Investors
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 notified vide
Notification
No. FEMA.20/2000- RB dated May 3, 2000, as amended from time to time and to A.P.
(DIR Series) Circular No. 71 dated February 3, 2015 and
A.P. (DIR Series)
Circular No. 73 dated February 6, 2015 in terms of which all future investments
by an FPI within the limit for investment in corporate bonds shall be required
to be made in corporate bonds with a minimum residual maturity of three years.
- The Reserve Bank has been receiving enquiries about the applicability
of the aforesaid directions on investment by FPIs in security receipts (SRs)
issued by the Asset Reconstruction Companies (ARCs). It is clarified that
the restriction on investments with less than three years residual maturity
shall not be applicable to investment by FPIs in SRs issued by ARCs.
However, investment in SRs shall be within the overall limit prescribed for
corporate debt from time to time.
- The aforesaid directions come into force with immediate effect. Further
operational guidelines, if any, will be issued by SEBI. All other existing
conditions for investment by FPIs in the debt market remain unchanged.
- AD Category – I banks may bring the contents of this circular to the
notice of their constituents and customers concerned.
- 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,
(R. Subramanian)
Chief General Manager
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