Foreign Exchange Management (Deposit) (Third Amendment) Regulations, 2012 - Amendment In Regulations 2 & 5 - 243/2012-RB - Foreign Exchange Management

RESERVE BANK OF INDIA (Foreign Exchange Department) (Central Office) NOTIFICATION Mumbai, the 19 th October, 2012 Foreign Exchange Management (Deposit) (Third Amendment) Regulations, 2012 - Amendment In Regulations 2 5 NOTIFICATION NO. FEMA 243/2012-RB Dated 19-10-2012 GSR 798(E),- In exercise of the powers conferred by clause ( f ) of sub-section (3) of section 6, sub-section (2) of section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) the Reserve Bank of India makes the following amendments in the Foreign Exchange Management (Deposit) Regulations, 2000 ( Notification No. FEMA 5/2000-RB, dated May 3,2000 ) (hereinafter referred to as 'the Principal Regulations') namely: 1. Short Title Commencement ( i ) These Regulations may be called the Foreign Exchange Management (Deposit) (Third Amendment) Regulations, 2012. ( ii ) They shall be deemed to have come into force from the 16th day of July, 2012. 2. Amendment of Regulation 2 In the Foreign Exchange Management (Deposit) Regulations, 2000 ( Notification No. FEMA.5/2000-RB, dated May 3, 2000 ), in Regulation 2 , after sub-regulation ( xii ), the following new sub-regulation shall be inserted, namely; 1 [ (xiia) 'Qualified Foreign Investor (QFI)' means (a) during the period from 9th day of August, 2011 to 15th day of July, 2012, a person who satisfied the following criteria at the relevant time; (i) resident of a country, that is compliant with the Financial Action Task Force (FATF) standards and is a signatory to the IOSCO's Multilateral Memorandum of Understanding (MMoU); and (ii) satisfied the KYC requirements stipulated by SEBI. Provided that such a person is not registered with SEBI as a Foreign Institutional Investor (FII) or Foreign Venture Capital Investor (FVCI). (b) With effect from 16th day of July, 2012, a person who satisfies the following criteria at the relevant time: (i) Resident in a country that is a member of FATF or a member of a group which is a member of FATF; and (ii) Resident in a country that is a signatory to IOSCO's MMoU (and referred to as Appendix A Signatories therein) or a signatory of a bilateral MoU with SEBI Provided that the person is not resident in a country listed in the public statements issued by FATF from time to time on jurisdictions having strategic AML/CFT deficiencies to which counter measures apply or that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies; Provided that such person is not resident in India; Provided further that such person is not registered with SEBI as an FII or Sub-Account of an FII or FVCI. Explanation. For the purposes of this clause : 1. bilateral MoU with SEBI shall mean a bilateral MoU between SEBI and the overseas regulator that, inter alia, provides for information sharing arrangements. 2. Member of FATF shall not mean an associate member of FATF.] 3. Amendment of Regulation 5 In the principal Regulations, in Regulation 5, after sub-regulation (3), a new sub-regulation (4) shall be inserted, namely:- (4). A Qualified Foreign Investor (QFI) may open a single non-interest bearing Rupee Account with Authorised Dealer in India without the prior approval of the Reserve Bank, for the limited purpose of routing the receipt and payment for transactions relating to purchase and sale of eligible securities as stipulated by the Reserve Bank, from time to time, subject to the following conditions: ( a ) The account shall be funded by inward remittance through normal banking channel and by credit of the sale/redemption/buyback proceeds (net of taxes) and on account of interest payment/dividend on the eligible securities for QFIs. ( b ) The funds in this account shall be utilized for purchase of eligible securities for QFIs or for remittance (net of taxes) outside India. ( c ) The Qualified Depository Participants (as per the extant SEBI regulations) will operate such non-interest bearing. Rupee Accounts on behalf of the QFIs and at the instructions of the QFIs. [No. FEMA, 243/2012-RB] RUDRA NARAYAN KAR, Chief General Manager Foot Note:- (i) @ it is clarified that no person will be adversely affected as a result of the retrospective effect being given to these Regulations. (ii) The Principal Regulations were published in the Official Gazette vide G.S.R. No. 388(E), dated, May 5, 2000 in Part II, Section 3, Sub-section (i) and subsequently amended as under:- (a) GSR No. 262(E), dated 09.04.2002; (b) GSR No. 577(E), dated 19.08.2002; (c) GSR No. 855(E), dated 31.12.2002; (d) GSR No. 494(E), dated 04/08/2004; (e) GSR No. 221(E), dated 07.04.2005; (f) GSR No. 663(E), dated 14.11.2005; (g) GSR No. 28(E), dated 19.01.2006; and (h) GSR No. 495(E), dated 23.07.2007. (k) GSR No. 91(E), dated 15.02.2008. (l) GSR No. 442(E), dated 23.06.2009. ------------------------- Notes:- 1. Corected vide CORRIGENDUM G.S.R. 626(E) - DATED 10-9-2013 , before it was read as, ( xii A ). 'Qualified Foreign Investor (QFI)' shall have the same meaning as assigned under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000