Article 5 - Limits - Depository Receipts Scheme, 2014

5. Limits 1. The aggregate of permissible securities which may be issued or transferred to foreign depositories for issue of depository receipts, along with permissible securities already held by persons resident outside India, shall not exceed the limit on foreign holding of such permissible securities under the Foreign Exchange Management Act, 1999. Explanation: For example, foreign investment in a company is ordinarily permissible up to x%. However, it can be increased up to y% with the approval of the company in the general body meeting. If no such approval has been granted, the permissible securities on which depository receipts may be issued, whether sponsored or unsponsored, cannot exceed x%. 2. The depository receipts may be converted to underlying permissible securities and vice versa, subject to the limit in sub-paragraph 1.