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TMI BlogForeign Exchange Management (Transfer or Issue of any Foreign Security) (Fourth Amendment) Regulations, 2013X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulation 2 In Regulation 2, in clause (f), for the words "the amount of direct investment by way of contribution to equity and loan and 100 per cent of the amount of guarantees", the following words, "the amount of direct investment by way of contribution to equity, loan and 100 per cent of the amount of guarantees and 50 per cent of the performance guarantees" shall be substituted and the same shall be deemed to have been substituted with effect from May 27, 2011. 3. Amendment to Regulation 6 A. In Regulation 6, in sub-regulation 2 (i) (a) after sub-clause (e), the following shall be inserted and the same shall be deemed to have been inserted with effect from May 27, 2011: "(f) Fifty per cent of the value of performance guarantee issued by Indian Party to or on behalf of the JV/WOS. Explanation: In cases where invocation of the performance guarantees breach the ceiling for the financial exposure of 400 per cent of the net worth of the Indian Party, the Indian Party shall seek the prior approval of the Reserve Bank before remitting funds from India, on account of such invocation." (b) after sub-clause (f), the following shall be inserted and the same shall be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the same shall be deemed to have been inserted with effect from March 28, 2012: "(iii) The indirect resident individual promoters of the Indian party may issue personal guarantee on behalf of the overseas JV / WOS of the Indian party provided the provisions under Regulation 6 are fulfilled by the Indian party and further provided that: a) total 'financial commitment' including all forms of guarantees remains within the overall ceiling stipulated for overseas investment by an Indian Party and b) no guarantee is 'open ended'. (iv) With prior approval of the Reserve Bank, an Indian party may undertake financial commitment without equity contribution in JV / WOS provided it is as per the business requirement of the Indian party and also as per the legal requirement of the host country. (v) Compulsorily Convertible Preference Shares (CCPS) shall be treated at par with equity shares and the Indian party is allowed to undertake financial commitment based on the contribution to JV by way of CCPS." 4. Amendment to Regulation 15 1[In Regulation 15, after sub-regulation (iv), the following sub-regulation (v) shall be added and the same shall be deemed to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the Indian Party is listed on a stock exchange in India and has a net worth of not less than Rs.100 crore; * where the Indian Party is an unlisted company and the investment in the overseas venture does not exceed USD 10 million and * where the Indian Party is a listed company having a net worth of less than Rs.100 crore but investment in an overseas JV/WOS does not exceed USD 10 million. (ii) Such disinvestments shall be subject to the conditions listed in clause (ii) to (vi) of sub-regulation (1) of Regulation 16. 6. Insertion of new Regulation in Part I:- After Regulation 16, the following Regulation shall be inserted and the same shall be deemed to have been inserted with effect from May 27, 2011: "16A Restructuring of the balance sheet of JV/WOS involving write-off of capital and receivables (1) A listed Indian Party, who has set up WOS abroad or have at least 51 per cent stake in an overseas JV, may write off capital (equity / preference shares) and other receivables, such as loans, royalty, technical knowhow fees and management fees in respect of the JV / WOS up to 25 per cent of the equity investment in the JV / WOS subject to condition that the Indian Party s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittance Scheme (LRS) in force at the time of acquisition. (2) A resident individual may apply to the Reserve Bank for permission to acquire shares of a foreign entity in part / full consideration of the professional services rendered to the foreign entity or in lieu of director's remuneration in case the limit prescribed under the Liberalized Remittance Scheme (LRS) exceeds. (3) Reserve Bank may, after taking into account, inter alia, the following factors, grant permission subject to such terms and conditions as are considered necessary: I. credentials and net worth of the individual and the nature of his/her profession; II. the extent of his/her forex earnings / balances in his EEFC and / or RFC account; III. financial and business track record of the foreign entity; IV. potential for forex inflow to the country; V. other likely benefits to the country." 9. Amendment to Regulation 22:- In Regulation 22, the sub-regulation (2) shall be substituted with the following and the same shall be deemed to have been substituted with effect from March 28, 2012: "(2) A person resident in India, being an individual, who is an employee or a director of Indian office or branch of a f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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