9911796707
TMI BlogOperational framework for reclassification of Foreign Portfolio Investment to Foreign Direct Investment (FDI)X X X X Extracts X X X X X X X X Extracts X X X X ..... ong with its investor group (hereinafter referred to as FPI ) shall be less than 10 percent of the total paid-up equity capital on a fully diluted basis. Further, FPI investing in breach of the prescribed limit shall have the option of divesting their holdings or reclassifying such holdings as FDI. In this regard, an operational framework for such reclassification of foreign portfolio investment by FPI to FDI is provided in the Annex. The AD Category-I banks may accordingly facilitate the reporting of such transactions as per this framework. 3. These directions will become operative with immediate effect. AD Category-I banks may bring the contents of this circular to the notice of their customers / constituents concerned. 4. The directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng approvals required in case of investment from land bordering countries and ensure that the acquisition beyond prescribed limit is made in accordance with the provisions applicable for FDI, which means that investment should be in adherence to entry route, sectoral caps, investment limits, pricing guidelines, and other attendant conditions for FDI under Schedule I to the Rules. ii) Concurrence of the Indian investee company concerned for reclassification of the investment to FDI to enable such company to ensure compliance with conditions pertaining to sectors prohibited for FDI, sectoral caps and government approvals, wherever applicable, under the Rules. 3) The FPI shall clearly articulate its intent to reclassify existing foreign portfo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FDI. After ensuring that the reporting for reclassification is complete in all aspects, the custodian shall unfreeze the equity instruments and process the request. The date of investment causing breach in such cases shall be considered as the date of reclassification. Thereafter, the entire investment of the FPI in the Indian company shall be considered as FDI and shall continue to be treated as FDI even if the investment falls to a level below ten percent subsequently. The Foreign Portfolio investor along with its investor group shall be treated as a single person for the purpose of reclassification of foreign portfolio investment. 6) In terms of the provisions contained in Schedule II to the Rules, the reclassification or divestment of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
