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TMI BlogMonitoring of Foreign Investment limits in listed Indian companiesX X X X Extracts X X X X X X X X Extracts X X X X ..... der FEMA. 2. As per FEMA, the onus of compliance with the various foreign investment limits rests on the Indian company. In order to facilitate the listed Indian companies to ensure compliance with the various foreign investment limits, SEBI in consultation with RBI has decided to put in place a new system for monitoring the foreign investment limits. The architecture of the new system has been explained in Annexure A. 3. The depositories (NSDL and CDSL) shall put in place the necessary infrastructure and IT systems for operationalizing the monitoring mechanism described at Annexure A. The Stock Exchanges (BSE, NSE and MSEI) shall also put in place the necessary infrastructure and IT systems for disseminating information on the available investment headroom in respect of listed Indian companies. 4. The depositories shall issue the necessary circulars and guidelines for collecting data on foreign investment from listed companies. The system for collecting this data from the companies shall go live on the date of the issuance of this circular. The companies shall provide the necessary data (details of which have been mentioned in Annexure A) to the depositories latest by Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable Sector vi. Applicable Sectoral Cap vii. Permissible Aggregate Limit for investment by FPIs viii. Permissible Aggregate Limit for investment by NRIs ix. Details of shares held by FPI, NRIs and other foreign investors, on repatriable basis, in demat as well as in physical form x. Details of indirect foreign investment which are held in both demat and physical form xi. Details of demat accounts of Indian companies making indirect foreign investment in the capital of the company xii. Whether the Indian company that has total foreign investment in it , is either not owned and not controlled by resident Indian Citizens or is owned or controlled by person s resident outside India (Yes or No) xiii. ISIN-wise details of the downstream investment in other Indian companies The information provided by the companies shall be stored in a Company Master database. The Designated Depository, if required, may seek additional information from the company for the purpose of monitoring the foreign investment limits. The companies shall ensure that in case of any corporate action, the necessary modification is reflected immediately in the Company Master database. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment headroom available as at the end of the day with respect to the aggregate FPI investment limit 11.6. If the available headroom is 3% or less than 3% of the aggregate FPI investment limit, a red flag shall be activated for that company. 11.7. Thereafter, the depositories and exchanges shall display the available investment headroom, in terms of available shares, for all companies for which the red flag has been activated, on their respective websites. 11.8. The data on the available investment headroom shall be updated on a daily end-of-day basis as long as the red flag is activated. Sectoral cap of the company 11.9. The system shall calculate the total foreign investment in the company by adding the aggregate NRI investment on the stock exchange, the aggregate FPI investment in the company and other foreign investment as provided by the company in the company master. 11.10. If the total foreign investment in a company is within 3% or less than 3% of the sectoral cap, then a red flag shall be activated for that company. 11.11. Thereafter, the depositories and exchanges shall display the available investment headroom, in terms of available shares, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be purchased by foreign investors till sectoral cap is not breached 600 Total quantity purchased by foreign investors on T day 1000 Breach quantity 400 Time Foreign Investor Purchased quantity Cumulative Purchase by foreign investor Quantity to be disinvested by the foreign investor 1000 hrs ABC 100 100 40 1015 hrs XYZ 250 350 100 1145 hrs TYU 50 400 20 1230 hrs POI 180 580 72 1300 hrs QSX 120 700 48 1400 hrs REW 150 850 60 1410 hrs LOP 150 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of detection of breach T+1 day (End of day) T+2 day (End of Day, if T+1 is a settlement holiday T+1 day (End of day) T+2 day (End of Day), if T+1 is a settlement holiday Date of settlement of transaction T+2 day T+3 day, if either T+1 day or T+2 day is a settlement holiday T+3 day T+4 day, if either T+2 day or T+3 day is a settlement holiday Disinvestment time frame 5 trading days from the date of settlement of the transactions which were executed on the day of the breach i.e. 5 trading days from T+2 day If T+1 day or T+2 day is a settlement holiday, then 5 trading days from T+3 day 5 trading days from the date of settlement of the transactions which were executed on T+1 day i.e. 5 trading days from T+3 day If T+2 day or T+3 day is a settlement holiday, then 5 trading days from T+4 day 23. In the event the foreign shareholding in a company comes within permissible limit during the time period for disinvestment, on account of sale by other FPI or other group of FPIs, the original FPI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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