Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Tenth Amendment) Regulations, 2016 - 372/2016-RB - Foreign Exchange Management

RESERVE BANK OF INDIA (Foreign Exchange Department) (Central Office) NOTIFICATION No.FEMA. 372/ 2016-RB Mumbai, the 27th October, 2016 Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Tenth Amendment) Regulations, 2016 G.S.R. 1015 (E). -In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) , the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000 ( Notification No. FEMA. 20/2000-RB dated 3rd May 2000 ) namely:- 1. Short Title Commencement:- (i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Tenth Amendment) Regulations, 2016. (ii) They shall come into force from the date of their publication in the Official Gazette. 2. Amendment to Regulations:- In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 , ( Notification No. FEMA 20/2000-RB dated 3rd May 2000 ), A. In Schedule 1, in Annex B, the existing entries F.1, F.1.1 and F.1.1.2 shall be substituted by the following: F.1 Asset Reconstruction Companies F.1.1 Asset Reconstruction Company 100% Automatic F.1.1.2 Other Conditions (i) Persons resident outside India can invest in the capital of Asset Reconstruction Companies (ARCs), up to 100% under the automatic route. (ii) Investment limit of a sponsor in the shareholding of an ARC will be governed by the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as amended from time to time. Similarly, investment by institutional/non-institutional investors will also be governed by the said Act, as amended from time to time. (iii) The total shareholding of a single FII/FPI shall be below 10% of the total paid-up capital. (iv) FIIs/FPIs can invest in the Security Receipts (SRs) issued by ARCs. FIIs/FPIs may be allowed to invest up to 100 per cent of each tranche in SRs issued by ARCs, subject to directions/guidelines of Reserve Bank of India. Such investment should be within the relevant regulatory cap as applicable. (v) All investments would be subject to provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, as amended from time to time. B. Amendment of the Schedule 5 (i) In Paragraph 1, for the existing clause (e), the following shall be substituted, namely: (e) Security Receipts (SRs) issued by Asset Reconstruction Companies up to 100 per cent of each tranche, subject to directions/guidelines of Reserve Bank of India . (ii) In paragraph 1B, in sub paragraph (iii), for the existing clause (g), the following shall be substituted, namely: (g) Security Receipts (SRs) issued by Asset Reconstruction Companies up to 100 per cent of each tranche, subject to directions/guidelines of Reserve Bank of India . (iii) In paragraph 1C, in sub paragraph 1, for the existing clause (e), the following shall be substituted, namely: (e) Security Receipts (SRs) issued by Asset Reconstruction Companies up to 100 per cent of each tranche, subject to directions/guidelines of Reserve Bank of India [F.No.1/17/EM/2016] ROHIT JAIN, Chief General Manager