SCHEDULE 08 - Scheme for Investment by Qualified Foreign Investors in equity shares - [See Regulation 5(7A)] - 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These rules have been superseded vide New Regulations New Regulations of 2017 1 [ Schedule 8 [See Regulation 5(7A)] Scheme for Investment by Qualified Foreign Investors in equity shares Eligible Investors 1. The Schedule shall be applicable to Qualified Foreign Investors (QFIs) as defined in these regulations. Eligible instruments and eligible transactions - 2. (a). Purchase: QFIs shall be permitted to invest through SEBI registered Qualified Depository Participants (QDPs)- (i) in equity shares of listed Indian companies through SEBI registered stock brokers on recognized stock exchanges in India. (ii) in equity shares of Indian companies which are offered to public in India in terms of the relevant and applicable SEBI guidelines/regulations. (iii) equity shares by way of rights shares, bonus shares or equity shares on account of stock split/consolidation or equity shares on account of amalgamation, demerger or such corporate actions. (b) Sale : QFIs shall be allowed to sell the equity shares so acquired by way of sale (i) Through recognized brokers on recognized stock exchanges in India; or (ii) In an open offer in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; or (iii) In an open offer in accordance with the SEBI (Delisting of Securities) Guidelines, 2009; or (iv) Through buyback of shares by a listed Indian company in accordance with the SEBI (Buyback) Regulations, 1998. Pricing 3. The pricing of all eligible transactions and investment in all eligible instruments by QFIs under this scheme shall be in accordance with the relevant and applicable SEBI guidelines only. Mode of payment/repatriation 4. For QFI investments under this scheme open a single non-interest bearing Rupee Account with an AD Category- I bank in India, for the limited purpose of routing the receipt and payment for transactions relating to purchase and sale of equity shares of listed Indian companies subject to the following conditions : (a) The account shall be funded by inward remittance through normal banking channel and by credit of the sale/redemption/buyback proceeds (net of taxes) and on account of interest payment/dividend on the eligible securities for QFIs. (b) The funds in this account shall be utilized for purchase of eligible securities for QFIs or for remittance (net of taxes) outside India. (c) The QDP will operate such non-interest bearing Rupee Accounts on behalf of the QFIs and at the instructions of the QFIs. Demat accounts 5. QFIs would be allowed to open a dedicated demat account with a QDP in India for investment in equity shares under the scheme. It is clarified that each QFI shall maintain a single demat account with a QDP for all investments in eligible securities for QFIs in India. Limits and its monitoring 6. The individual and aggregate investment limits for the QFIs shall be 5 per cent and 10 per cent respectively of the paid up capital of an Indian company. These limits shall be over and above the FII and NRI investment ceilings prescribed under the Portfolio Investment Scheme for foreign investment in India. Further, wherever there are composite sectoral caps under the extant FDI policy, these limits for QFI investment in equity shares shall also be within such overall FDI sectoral caps. The onus of monitoring and compliance of these limits shall remain jointly and severally with the respective QFIs, DPs and the respective Indian companies (receiving such investment) 7. Other conditions (i) Eligibility - QFI would have to meet eligibility criteria as prescribed by SEBI from time to time. (ii) Know Your Customer (KYC) - QDPs will ensure KYC of the QFIs as per the norms prescribed by SEBI. AD Category-I banks will also ensure KYC of the QFIs for opening and maintenance of the single non-interest bearing Rupee accounts as per the extant norms. (iii) Permissible currencies - QFIs will remit foreign inward remittance through normal banking channel in any permitted currency (freely convertible) directly into the single non-interest bearing Rupee account of the QFI maintained with an AD Category-I bank. Reporting 8. In addition to the reporting to SEBI as may be prescribed by them, QDPs and AD Category-I banks (maintaining QFI accounts) will also ensure reporting to the Reserve Bank of India in a manner and format as prescribed by the Reserve Bank of India from time to time] ------------------------------- Notes:- 1. Inserted vide Notification No. FEMA. 242/2012-RB Dated 19-10-2012