SCHEDULE 06 - Investment in an Indian Venture Capital Undertaking by a registered Foreign Venture Capital Investor - [See Regulation 5(5)] - 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These rules have been superseded vide New Regulations New Regulations of 2017 3 [ SCHEDULE 6 [See Regulation 5(5)] INVESTMENT BY A REGISTERED FOREIGN VENTURE CAPITAL INVESTOR 1. Investment by Foreign Venture Capital Investor (1) A Foreign Venture Capital Investor (FVCI) registered under the SEBI (FVCI) Regulations, 2000, may purchase (a) equity or equity linked instruments or debt instruments, issued by an Indian company engaged in any sector mentioned at Annex to this Schedule and whose shares are not listed on a recognised stock exchange at the time of issue of the said securities/instruments; (b) equity or equity linked instruments or debt instruments issued by a startup, irrespective of the sector in which it is engaged; (c) units of a Venture Capital Fund (VCF) or of a Category I Alternative Investment Fund (Cat-I AIF) or units of a scheme or of a fund set up by a VCF or by a Cat-I AIF; subject to the terms and conditions as may be laid down by the Reserve Bank. Note: An FVCI registered under the SEBI (FVCI) Regulations, 2000 shall not require any prior approval of RBI for investments made under this Schedule. (2) A registered FVCI may purchase the securities / instruments mentioned above either from the issuer of these securities / instruments or from any person holding these securities / instruments or on a recognized stock exchange. (3) The consideration for all investment by an FVCI shall be paid out of inward remittance from abroad through normal banking channels or out of sale / maturity proceeds or income generated from investment already made as stated earlier. 2. Maintenance of account by the registered FVCI A registered FVCI may open a foreign currency account and/or a rupee account with a designated branch of an Authorised Dealer subject to the condition that the account will be used only and exclusively for transactions under this Schedule. 3. Transfer of investments The FVCI may acquire, by purchase or otherwise, from, or transfer, by sale or otherwise, to, any person resident or nonresident, any security / instrument it is allowed to invest in, at a price that is mutually acceptable to the buyer and the seller/issuer. The FVCI may also receive the proceeds of the liquidation of VCFs or of Cat-I AIFs or of schemes/funds set up by the VCFs or Cat-I AIFs. 4. Reporting The actual inflow/outflow and the investments made by FVCIs may be reported in a manner as prescribed by Reserve Bank or SEBI. ANNEX List of sectors in which a Foreign Venture Capital Investor is allowed to invest 1. Biotechnology 2. IT related to hardware and software development 3. Nanotechnology 4. Seed research and development 5. Research and development of new chemical entities in pharmaceutical sector 6. Dairy industry 7. Poultry industry 8. Production of bio-fuels 9. Hotel-cum-convention centres with seating capacity of more than three thousand. 10. Infrastructure sector. ( This will include activities included within the scope of the definition of infrastructure under the External Commercial Borrowing guidelines / policies notified under the extant FEMA Regulations as amended from time to time ).] ***************************** Note : 1. Schedule 6 has been added vide Notification No. 032/2000 dated 26/12/2000 2. Inserted vide Notification No. FEMA. 242/2012-RB Dated 19-10-2012 w.e.f. 19th day of March 2012. 3. Substituted vide Not. 363/2016-RB - Dated 28-4-2016 before it was read as, 1 SCHEDULE 6 [See Regulation 5(5)] Investment in an Indian Venture Capital Undertaking by a registered Foreign Venture Capital Investor 1. Investment by Foreign Venture Capital Investor. 1. A registered Foreign Venture Capital Investor (FVCI) may, through the Securities and Exchange Board of India, apply to the Reserve Bank of permission to invest in Indian Venture Capital Undertaking (IVCU) or in a VCF or in a scheme floated by such VCFs. Permission may be granted by Reserve Bank subject to such terms and conditions as may be considered necessary 2. The registered FVCI permitted by Reserve Bank under sub-paragraph (1), may purchase equity/ equity linked instruments/ debt/ debt instruments, debentures of a IVCU or of a VCF through Initial Public Offer or Private Placement or in units of schemes/funds set up by a VCF. 2 [The registered FVCI may invest in the eligible securities (equity, equity linked instruments, debt, debt instruments, debentures of an IVCU or VCF, units of schemes/funds set up by a VCF) by way of private arrangement/purchase from a third party, subject to the terms and conditions stipulated by the Reserve Bank from time to time. The registered FVCI may invest in securities on a recognized stock exchange subject to the provisions of the SEBI (FVCI) Regulations, 2000, as amended from time to time, as well as the terms and conditions stipulated therein.] 3. The amount of consideration for investment in VCFs/IVCUs 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 Para 2. 2. Maintenance of account by the registered FVCI for investment in IVCUs/ VCFs or schemes/funds set up by the VCFs. The Reserve Bank may, on applications, permit a FVCI which has received in principle registration from SEBI to open a Foreign Currency Account and/or a Rupee Account with a designated branch of an authorised dealer with the following permissible transactions: (i) Crediting inward remittance received through normal banking channels or the sale proceeds (net of taxes) of investments. (ii) Making investment in accordance with the provisions of paragraph 1 above. (iii) transferring funds from the Foreign Currency Account of the FVCI to their own Rupee account. (iv) Remitting funds from the Foreign Currency of rupee account subject to payment of applicable taxes. (v) Meeting local expenses of the FVCI. 3. Forward Cover Authorised Dealers may offer forward cover to FVCIs to the extent of total inward remittance. In case the FVCI has made any remittance by liquidating some investments, original cost of the investments will be deducted from the eligible cover. 4. Valuation of Investments The FVCI may acquire by purchase or otherwise or sell shares/convertible debentures/units or any other investment held by it in the IVCUs or VCFs or schemes/funds set up by the VCFs at a price that is mutually acceptable to the buyer and the seller/issuer. The FVCI may also receive the proceeds arising of the liquidation of VCFs or schemes/funds set up by the VCFs. 5. Adherence to SEBI Guidelines FVCIs shall abide by the relevant regulations/guidelines issued by Securities and Exchange Board.