Investments by FPIs in Non-Convertible / Redeemable preference shares or debentures of Indian companies - SEBI - CIR/IMD/FIIC/13/2014

CIRCULAR CIR/IMD/FIIC/13/2014 June 17, 2014 All Foreign Portfolio Investors through their Designated Depository Participants The Depositories (NSDL and CDSL) Sir / Madam, Sub: Investments by FPIs in Non-Convertible / Redeemable preference shares or debentures of Indian companies 1. Pursuant to the Reserve Bank of India (RBI) circular RBI/2013-14/632 dated June 06, 2014, it has been decided as follows: a) In terms of the RBI circular A.P. (DIR Series) Circular No. 84 dated January 06, 2014, an Indian company is permitted to issue non-convertible/redeemable preference shares or debentures to non-resident shareholders, including the depositories that act as trustees for the ADR/GDR holders by way of distribution as bonus from its general reserves under a Scheme of Arrangement approved by a Court in India under the provisions of the Companies Act, as applicable, subject to no-objection from the Income Tax Authorities. b) FPIs are permitted to invest on repatriation basis, in non-convertible/redeemable preference shares or debentures issued by an Indian company in terms of the above RBI circular and listed on recognized stock exchanges in India. c) The investments by FPIs in the abovementioned securities shall be reckoned against the Corporate Debt Investment Limits (US$ 51 billion). This circular shall come into effect immediately.This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992. A copy of this circular is available at the web page Circulars on our website www.sebi.gov.in . Custodians are requested to bring the contents of this circular to the notice of their FII clients. Yours faithfully, S MADHUSUDHANAN Deputy General Manager Tel No.: 022-26449614 Email: [email protected]