SCHEDULE 02 - Purchase/sale of shares and/or convertible debentures of an Indian company by a registered Foreign Institutional Investor under Portfolio Investment Scheme - [See Regulation 5 (2)] - Foreign Exchange Management (Transfer or Issue Of Security By A Person Resident Outside India) Regulations, 2000

These rules have been superseded vide New Regulations New Regulations of 2017 SCHEDULE 2 [See Regulation 5 (2)] Purchase/sale of 12 [ shares or convertible debentures or warrants ] of an Indian company by a registered Foreign Institutional Investor under Portfolio Investment Scheme 1. Purchase/sale of 13 [shares or convertible debentures or warrants ] 3 (1) A registered Foreign Institutional Investor (FII) may purchase the 11 [shares or convertible debentures or warrants ] of an Indian company under Portfolio Investment Scheme. 3 (2) The purchase of 14 [shares or convertible debentures or warrants] under sub-paragraph (1) shall be made through registered broker on recognized stock exchange in India. (3) The amount of consideration for purchase of 15 [shares or convertible debentures or warrants] shall be paid out of inward remittance from abroad through normal banking channels or out of funds held in an account maintained with the designated branch of an authorised dealer in India, in accordance with these Regulations. (4) The total holding by each FII/SEBI approved sub-account of FII shall not exceed 10% (ten per cent) of the total paid-up equity capital or 10% (ten per cent) of the paid-up value of each series of convertible debentures issued by an Indian company and the total holdings of all FIIs/sub-accounts of FIIs put together shall not exceed 24 per cent of paid-up equity capital or paid up value of each series of convertible debentures. 1 Provided that the limit of 24% referred to in this paragraph may be increased up to the sectoral cap/statutory ceiling, as applicable, by the Indian company concerned by passing a resolution by its Board of Directors followed by passing of a special resolution to that effect by its General Body. Explanation:- For arriving at the ceiling on holdings of FIIs, 16 [shares or convertible debentures or warrants] acquired both through primary as well as secondary market will be included. However, the ceiling will not include investment made by FII through off-shore Funds, Global Depository receipts and Euro-Convertible Bonds. 2 (5) A registered FII is permitted to purchase 17 [shares or convertible debentures or warrants] of an Indian company through offer/private placement, subject to the ceiling specified in sub-paragraph (4) of this paragraph and the Indian company is permitted to issue such shares; Provided that - (i). in case of Public Offer, the price of the shares to be issued is not less than the price at which shares are issued to residents, and 10 [(ii) in case of issue by private placement, the price is not less than the price arrived in terms of SEBI guidelines or not less than the fair price worked out as per any internationally accepted pricing methodology for valuation of shares on arm s length basis, duly certified by a SEBI registered Merchant Banker or Chartered Accountant, as applicable.] 7 [(6) A registered FII may, undertake short selling as well as lending and borrowing of securities subject to such conditions as may be stipulated by the Reserve Bank of India and the SEBI from time to time.] 4 2. Maintenance of account by a registered FII for routing transactions of purchase and sale of 18 [ shares or convertible debentures or warrants ] A registered Foreign Institutional Investor may open a Foreign Currency Account and/or a Special Non-Resident Rupee Account with a designated branch of an authorized dealer for routing the receipt and payment for transaction relating to purchase and sale of 19 [shares or convertible debentures or warrants ] under this Scheme, subject to the following conditions: (i) The Account shall be funded by inward remittance through normal banking channels or by credit of sale proceeds (net of taxes) of the 20 [shares or convertible debentures or warrants ] sold on stock exchange. (ii) The funds in the account shall be utilized for purchase of 21 [shares or convertible debentures or warrants] in accordance with the provisions of paragraph 1 of this Scheme or for remittance outside India. (iii) The funds from Foreign Currency Account of the registered FII may be transferred to Special Non-Resident Rupee account of the same FII and vice-versa. 9 [(iv) The Foreign Currency Account and the Special Non-Resident Rupee account of the registered FII shall be a non-interest bearing account/s.] 3. Remittance of sale proceeds of 22 [shares or convertible debentures or warrants ] The designated branch of an authorised dealer may allow remittance of net sale proceeds (after payment of taxes) or credit the net amount of sale proceeds of 23 [shares or convertible debentures or warrants ] to the foreign currency account or a Non-resident Rupee Account of the registered Foreign Institutional Investor concerned. 4. Investment by certain other investors 5 (1) A domestic asset management company or portfolio manager, who is registered with SEBI as a foreign institutional investor for managing the fund of a sub-account may make investment under the Scheme on behalf of (i) a person resident outside India who is a citizen of a foreign state, or (ii) a body corporate registered outside India; Provided that such investment is made out of funds raised or collected or brought from outside through normal banking channel. 6 (2) Investments permitted to be made under sub-paragraph (1) shall not exceed 5% (five per cent) of the total paid-up equity capital or 5% (five per cent) of the paid-up value of each series of convertible debentures issued by an Indian company, and shall also not exceed the over-all ceiling specified in sub-paragraph (4) of paragraph 1 of this Schedule. *********************** Note : 1. Proviso has been substituted, vide Notification No. 045/2001 dated 20/9/2001 , before it was read as Provided that the limit of 49% referred to in this paragraph may be increased up to the sectoral cap/statutory ceiling, as applicable, by the Indian company concerned by passing a resolution by its Board of Directors followed by passing of a special resolution to that effect by its General Body . Before that, for the words 40 per cent , words 49 per cent , has been substituted vide Notification no. 041/2001 dated 2/3/2001 2. Has been substituted vide Notification No. 094/2003 dated 18/6/2003 , before it was read as, A registered FII may also be permitted to purchase shares/ convertible debentures of an Indian company through private placement/ arrangement, subject to the ceilings specified in sub-paragraph (4) of this paragraph. 3. Has been substituted vide Notification No. 108/2004 dated 1/1/2004 , before it was read as, (1) A registered Foreign Institutional Investor (FII) may, through the Securities and Exchange Board of India, apply to the Reserve Bank for permission to purchase the shares and convertible debentures of an Indian company under Portfolio Investment Scheme. The permission may be granted by Reserve Bank subject to such terms and conditions as may be considered necessary. (2) The registered FII permitted by the Reserve Bank under sub-paragraph 1, shall purchase the shares/convertible debentures of an Indian company through registered brokers on recognised stock exchanges in India . 4. Has been substituted vide Notification No.Supra, before it was read as, The Reserve Bank may, on application, permit a registered Foreign Institutional Investor to open a Foreign Currency Account and/or a Non-resident Rupee Account with a designated branch of an authorised dealer for routing the receipt of and payment for transactions relating to purchase and sale of shares / convertible debentures under this Scheme, subject to the following conditions:- i) The account shall be funded by inward remittance through normal banking channels or by credit of sale proceeds (net of taxes) of the shares / convertible debentures sold on stock exchange. ii) The funds in the account shall be utilised for purchase of shares / convertible debentures in accordance with the provisions of paragraph 1 of this Scheme or for remittance outside India. iii) The funds from Foreign Currency Account of the registered FII may be transferred to Non-Resident Rupee account of the same FII and vice a versa. 5. Has been substituted vide Notification No. 108/2004 dated 1/1/2004 , before it was read as, (1) Reserve Bank may, subject to such terms and conditions as it may consider necessary permit a domestic asset management company or portfolio manager who is registered with SEBI as a foreign institutional investor for managing the funds of a sub-account, to make investment under the Scheme on behalf of:- (i) a person resident outside India who is a citizen of a foreign state ,or (ii) a body corporate registered outside India , Provided such investment is made out of funds raised or collected or brought from outside India through normal banking channel . 6. sub-paragraph (2) has been deleted and sub-paragraph (3) has been re-numbered as sub-paragraph(2), before deletion it sub para 2 was read as The application to Reserve Bank for permission under sub-paragraph (1) may be made through SEBI. Vide Notification No. Supra 7. Has been inserted vide Notification No. 175/2008-RB dated 22/2/2008 8. Substituted vide Notification No. FEMA. 242/2012-RB Dated 19-10-2012 w.e.f. 21st day of April 2010, before it was read as, (ii) in case of issue by private placement, the price is not less than the price arrived in terms of SEBI guidelines or guidelines issued by erstwhile Controller of Capital Issues, as applicable. 9. Inserted vide Notification No. FEMA. 242/2012-RB Dated 19-10-2012 10. Substituted vide Notification No. FEMA.306/2014 -RB dated May 23, 2014 , before it was read as, 8 [(ii). in case of issue by private placement, the price is not less than the price arrived in terms of SEBI guidelines or not less than the fair price worked out as per the Discounted Cash Flow method duly certified by a SEBI registered Merchant Banker or Chartered Accountant, as applicable.] 11. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 12. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 13. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 14. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 15. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 16. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 17. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 18. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 19. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 20. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 21. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 22. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures . 23. Substituted vide Notification No. FEMA. 308/2014-RB, dated June 30, 2014 , before it was read as, shares and convertible debentures .