Regulation 21 - Prior Permission from Reserve Bank in certain cases - Foreign Exchange Management (Transfer Or Issue of Any Foreign Security) Regulations, 2000

Has been superseded vide Notification No. 120/2004 dated 7/7/2004 21. Prior Permission from Reserve Bank in certain cases 1. Reserve Bank, on an application, may permit a person resident in India to acquire foreign securities :- 1 (a) A person resident in India being an individual may acquire foreign securities as qualification shares issued by a company incorporated outside India for holding the post of a director in the company :- provided that (i) the number of shares so acquired shall be the minimum required to be held for holding the post of director and in any case shall not exceed 1% of the paid-up capital of the company, and (ii) the consideration for acquisition of such shares does not exceed US$ 20,000 (Twenty Thousand only) in a calendar year. (b) A person resident in India being an individual seeking to acquire qualification shares in a company outside India beyond the limits laid down in the proviso to clause (a) shall apply to the Reserve Bank for prior approval. 2 (c) "A person resident In India, being an individual, may acquire foreign securities by way of rights shares in a company incorporated outside India :- Provided that the right shares are being issued by virtue of holding shares in accordance with the provisions of the law for the time being in force. (d) by way of purchase by the employees/directors of an Indian promoter company of shares of a Joint Venture or Wholly Owned Subsidiary outside India of the Indian promoter company, in the field of software:- Provided that - i. the consideration for purchase does not exceed US10,000 or its equivalent per employee in a block of five calendar years, ii. the shares so acquired do not exceed 5% of the paid-up capital of the Joint Venture or Wholly Owned Subsidiary outside India, and iii. after allotment of such shares, the percentage of shares held by the Indian promoter company, together with shares allotted to its employees is not less than the percentage of shares held by the Indian promoter company prior to such allotment. 2. Reserve Bank may, on an application made to it by the Indian software company allow its resident employees (including working directors) to purchase foreign securities under the ADR/GDR linked stock option schemes:- Provided that the consideration for purchase does not exceed US $ 50,000/- or its equivalent in a block of five calendar years. ************************ Note : 1. Has been substituted vide Notification No. 059/2002 dated 24/4/2002 2. Has been substituted vide Notification No Supra