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Date: 14-Mar-2024 Category: Extra Ordinary State: Union Government Country: India

Foreign Exchange Management(Non debt Instruments) (Second Amendment) Rules 2024

Issued by Ministry of Finance · Department of Economic Affairs

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Executive Summary & Key Takeaways

What it means

  • The notification introduces the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2024, which amends the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
  • The amendment clarifies the definition of 'unit' to include partly paid-up units permitted under Securities and Exchange Board of India (SEBI) regulations, in consultation with the Government of India.

Key Changes

  • The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 are amended.
  • Rule 2, clause (aq) of the 2019 Rules is updated to include an explanation clarifying that 'unit' includes partly paid-up units.
  • The amendment comes into effect on the date of its publication in the Official Gazette, which is March 14, 2024.

Impact Analysis

Stakeholders Impacted

  • Financial institutions and intermediaries dealing with non-debt instruments will need to update their understanding of the regulations.

Suggested Action Items

  • Seek legal counsel to ensure full compliance with the amended regulations.

Key Entities Referenced

Central Government: The issuer of the notification, acting through the Ministry of Finance (Department of Economic Affairs). Foreign Exchange Management Act, 1999: The enabling legislation under which the rules are framed. Specifically, section 46 (2) (aa) and (ab) are referenced. Foreign Exchange Management (Non-debt Instruments) Rules, 2019: The principal rules being amended by this notification. Securities and Exchange Board of India (SEBI): The regulatory body whose regulations regarding partly paid-up units are referenced in the explanation.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-14032024-253011 CG-DxLx-xEG-I1D4H0x3x2x0 24-253011 xxxGIDExxx ऄसाधारण EXTRAORDINARY भाग II—खण्ड 3—ईप-खण्ड (ii) PART II—Section 3—Sub-section (ii) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 1295] नइ ददल्ली, बहृ स्ट्प जतिार, माचय 14, 2024/फाल् गनु 24, 1945 No. 1295] NEW DELHI, THURSDAY, MARCH 14, 2024/PHALGUNA 24, 1945 जित्त मत्रं ालय (अर्थथक काय यजिभाग) ऄजधसचू ना नइ ददल्ली, 14 माच,य 2024 का.अ. 1361(ऄ).—केंद्रीय सरकार, जिदिे ी मुद्रा प्रबंध ऄजधजनयम, 1999 (1999 का 42) की धारा 46 की ईपधारा (2) के खंड (कक) और खंड (कख) द्वारा प्रदत्त िजियों का प्रयोग करते हुए, जिदिे ी मुद्रा प्रबंध (गैर ऋण जलखत) जनयम, 2019 में और संिोधन करने के जलए जनम्नजलजखत जनयम बनाती ह,ै ऄथायत:् 1. (1) आन जनयमों का संजिप् त नाम जिदेिी मुद्रा प्रबंध (गैर ऋण जलखत) (दसू रा संिोधन) जनयम, 2024 ह।ै (2) ये रािपत्र में ईनके प्रकािन की तारीख को प्रिृत्त होंगे। 2. जिदिे ी मुद्रा प्रबंध (गैर ऋण जलखत) जनयम, 2019 के जनयम 2 के खंड (कथ) म,ें जनम्नजलजखत स्ट्पष्टीकरण ऄंतःस्ट्थाजपत दकया िाएगा, ऄथायत्:- "स्ट्पष्टीकरण :- आस खंड के प्रयोिनों के जलए, यूजनट में िह यूजनट सजममजलत होगी जिसका भागत: समादत्त दकया गया ह,ै जिसे भारत सरकार के परामिय से भारतीय प्रजतभजू त और जिजनमय बोडय द्वारा बनाए गए जिजनयमों के ऄधीन ऄनुज्ञाप्राप्त ह;ै"। [फा. सं. 1/8/इएम/2019] सुरजभ िनै , संयुि सजचि 1945 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] टटप्पण : मलू जनयम भारत के रािपत्र, ऄसाधारण, भाग II, खंड 3, ईपखंड (ii) में संखयांक का. अ. 3732 (ऄ), तारीख 17 ऄिूबर, 2019 द्वारा प्रकाजित दकए गए थे और तत् पश् चात ्जनम्नजलजखत ऄजधसूचना संख याकं ों द्वारा संिोजधत दकए गए थे: - (i) का.अ. 4355 (ऄ.), ददनाकं 5 ददसमबर 2019; (ii) का.अ. 1278 (ऄ.), ददनाकं 22 ऄप्रैल, 2020; (iii) का.अ. 1374 (ऄ.), ददनाकं 27 ऄप्रैल, 2020; (iv) का.अ. 2442 (ऄ.), ददनाकं 27 िुलाइ, 2020; (v) का.अ. 4441 (ऄ.), ददनाकं 8 ददसमबर, 2020; (vi) का.अ. 3206 (ऄ.), ददनाकं 9 ऄगस्ट्त, 2021; (vii) का.अ. 3411 (ऄ.), ददनाकं 19 ऄगस्ट्त, 2021; (viii) का.अ. 4091 (ऄ.), ददनाकं 5 ऄक्टूबर 2021; (ix) का.अ. 4242 (ऄ.), ददनाकं 12 ऄक्टूबर 2021; (x) का.अ. 1202 (ऄ.), ददनाकं 12 ऄप्रैल 2022 और (xi) का.अ. 332 (ऄ.), ददनाकं 24 िनिरी 2024 । MINISTRY OF FINANCE (Department of Economic Affairs) NOTIFICATION New Delhi, the 14th March, 2024 S.O. 1361(E).—In exercise of the powers conferred by clauses (aa) and (ab) of sub-section (2) of section 46 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government hereby makes the following rules further to amend the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, namely:- 1. (1) These rules may be called the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2024. (2) They shall come into force on the date of their publication in the Official Gazette. 2. In the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, in rule 2, in clause (aq), the following Explanation shall be inserted, namely:- “Explanation.- For the purposes of this clause, unit shall include unit that has been partly paid up, which is permitted under the regulations framed by the Securities and Exchange Board of India, in consultation with Government of India;”. [F. No. 1/8/EM/2019] SURBHI JAIN, Jt. Secy. Note: The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number S.O.3732 (E), dated the 17th October, 2019 and subsequently amended vide notification numbers: - (i) S.O. 4355 (E), dated the 5th December 2019; (ii) S.O. 1278 (E), dated the 22nd April, 2020; (iii) S.O. 1374 (E), dated the 27th April, 2020; (iv) S.O. 2442 (E), dated the 27th July, 2020; (v) S.O. 4441 (E), dated the 8th December, 2020; (vi) S.O. 3206 (E), dated the 9th August, 2021; (vii) S.O. 3411 (E), dated the 19th August, 2021; (viii) S.O. 4091 (E), dated the 5th October 2021; (ix) S.O. 4242 (E), dated the 12th October 2021; (x) S.O. 1202 (E), dated 12th April 2022; and (xi) S.O. 332(E), dated 24th January 2024. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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