Executive Summary:
This notification, titled the Foreign Exchange Management Transfer or Issue of Security by a Person Resident outside India (Sixteenth Amendment Regulations, 2016), amends the Principal Regulations of 2000. It pertains to foreign investment in pension funds, specifying conditions related to regulatory compliance and ownership. The regulations came into force on November 4, 2016, the date of their publication in the Official Gazette.
Key Points / Main Content:
* **Short Title and Commencement:**
* These regulations are called the Foreign Exchange Management Transfer or Issue of Security by a Person Resident outside India (Sixteenth Amendment Regulations, 2016).
* They came into force on the date of their publication in the Official Gazette (November 4, 2016).
* **Amendment to Schedule 1, Annex B, F.10 (Pension):**
* Foreign investment in Pension Funds is allowed as per the PFRDA Act, 2013, under the automatic route.
* Entities bringing in foreign investment must obtain registration from PFRDA and comply with PFRDA Act, 2013, and its associated rules/regulations.
* Indian pension funds must maintain ownership and control in the hands of resident Indian entities, as determined by the Government of India/PFRDA.
* Ownership and control are defined in Regulation 14 of the Principal Regulations.
Impact Analysis:
* **Pension Funds:**
* *Impact:* Pension funds are now subject to revised regulations concerning foreign investment. They are permitted to receive foreign investment under the automatic route, subject to specific conditions.
* *Action Required:* Indian pension funds need to ensure compliance with PFRDA Act, 2013, maintain Indian ownership/control, and adhere to Regulation 14 of the Principal Regulations regarding ownership and control definitions.
* **Entities Bringing in Foreign Investment:**
* *Impact:* These entities can invest in Indian pension funds but are subject to registration and compliance requirements.
* *Action Required:* They must obtain necessary registration from PFRDA and comply with the PFRDA Act, 2013, and its rules/regulations.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the country's monetary policy.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
Foreign Exchange Management Transfer or Issue of Security by a Person Resident outside India Regulations, 2000: Regulations issued by Reserve Bank of India under the Foreign Exchange Management Act, 1999, governing the transfer or issue of security by a person resident outside India.
Mumbai, Maharashtra: City in Maharashtra where the Central Office of the Reserve Bank of India Foreign Exchange Department is located.
Foreign Exchange Management Transfer or Issue of Security by a Person Resident outside India Sixteenth Amendment Regulations, 2016: The specific amendment regulations being notified in this document.
Pension Fund Regulatory and Development Authority: The regulatory body for pension funds in India.
PFRDA Act, 2013: The Act of Parliament that established the Pension Fund Regulatory and Development Authority and regulates the pension sector in India.
Shekhar Bhatnagar: Chief General Manager-In Charge at Reserve Bank of India.
Reserve Bank of India
Foreign Exchange Department
Central Office
Mumbai – 400 001
Notification No.FEMA.379/ 2016-RB November 04, 2016
Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) (Sixteenth Amendment) Regulations, 2016
In exercise of the powers conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the Foreign
Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in
the Foreign Exchange Management (Transfer or issue of Security by a Person Resident outside India) Regulations, 2000
(Notification No.FEMA.20/2000-RB dated 3rd May 2000), (hereinafter referred to as 'the Principal Regulations')
namely:-
1. Short Title & Commencement:-
(i) These Regulations may be called the Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident outside India) (Sixteenth Amendment) Regulations, 2016.
(ii) They shall come into force from the date of their publication in the Official Gazette.
2. Amendment of the Schedule 1
In the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations,
2000, (Notification No.FEMA 20/2000-RB dated 3rd May 2000), in Schedule 1, in Annex B, for the existing entry
F.10, the following shall be substituted, namely:
F.10. Pension 49% Automatic route
F.10.1 Other Conditions
a) Foreign investment in the Pension Funds is allowed as per the Pension Fund Regulatory and
Development Authority (PFRDA) Act, 2013.
b) Foreign investment in Pension Funds will be subject to the condition that entities bringing in foreign
investments as equity shares or preference shares or convertible debentures or warrants as per Section 24
of the PFRDA Act, 2013 shall obtain necessary registration from the PFRDA and comply with other
requirements as per the PFRDA Act, 2013 and Rules and Regulations framed under it for so participating
in Pension Fund Management activities in India.
c) An Indian pension fund shall ensure that its ownership and control remains at all times in the hands of
resident Indian entities as determined by the Government of India / PFRDA as per the rules/regulation
issued by them from time to time. The meaning of ownership and control would be as defined in
Regulation 14 of the Principal Regulations.
(Shekhar Bhatnagar)
Chief General Manager-In ChargeFoot Note:-
The Principal Regulations were published in the Official Gazette vide G.S.R. No.406 (E) dated May 8, 2000 in Part II,
Section 3, sub-Section (i) and subsequently amended as under:-
G.S.R.No. 158(E) dated 02.03.2001
G.S.R.No. 175(E) dated 13.03.2001
G.S.R.No. 182(E) dated 14.03.2001
G.S.R.No. 4(E) dated 02.01.2002
G.S.R.No. 574(E) dated 19.08.2002
G.S.R.No. 223(E) dated 18.03.2003
G.S.R.No. 225(E) dated 18.03.2003
G.S.R.No. 558(E) dated 22.07.2003
G.S.R.No. 835(E) dated 23.10.2003
G.S.R.No. 899(E) dated 22.11.2003
G.S.R.No. 12(E) dated 07.01.2004
G.S.R.No. 278(E) dated 23.04.2004
G.S.R.No. 454(E) dated 16.07.2004
G.S.R.No. 625(E) dated 21.09.2004
G.S.R.No. 799(E) dated 08.12.2004
G.S.R.No. 201(E) dated 01.04.2005
G.S.R.No. 202(E) dated 01.04.2005
G.S.R.No. 504(E) dated 25.07.2005
G.S.R.No. 505(E) dated 25.07.2005
G.S.R.No. 513(E) dated 29.07.2005
G.S.R.No. 738(E) dated 22.12.2005
G.S.R.No. 29(E) dated 19.01.2006
G.S.R.No. 413(E) dated 11.07.2006
G.S.R.No. 712(E) dated 14.11.2007
G.S.R.No. 713(E) dated 14.11.2007
G.S.R.No. 737(E) dated 29.11.2007
G.S.R.No. 575(E) dated 05.08.2008
G.S.R.No. 896(E) dated 30.12.2008
G.S.R.No. 851(E) dated 01.12.2009
G.S.R.No. 341 (E) dated 21.04.2010
G.S.R.No. 821 (E) dated 10.11.2012
G.S.R.No. 606(E) dated 03.08.2012
G.S.R.No. 795(E) dated 30.10.2012
G.S.R.No. 796(E) dated 30.10.2012
G.S.R. No. 797(E) dated 30.10.2012
G.S.R.No. 945 (E) dated 31.12.2012
G.S.R. No.946(E) dated 31.12.2012
G.S.R. No.38(E) dated 22.01.2013G.S.R.No.515(E) dated 30.07.2013
G.S.R.No.532(E) dated 05.08.2013
G.S.R. No.341(E) dated 28.05.2013
G.S.R.No.344(E) dated 29.05.2013
G.S.R. No.195(E) dated 01.04.2013
G.S.R.No.393(E) dated 21.06.2013
G.S.R.No.591(E) dated 04.09.2013
G.S.R.No.596(E) dated 06.09.2013
G.S.R.No.597(E) dated 06.09.2013
G.S.R.No.681(E) dated 11.10.2013
G.S.R.No.682(E) dated 11.10.2013
G.S.R. No.818(E) dated 31.12.2013
G.S.R. No.805(E) dated 30.12.2013
G.S.R.No.683(E) dated 11.10.2013
G.S.R.No.189(E) dated 19.03.2014
G.S.R.No.190(E) dated 19.03.2014
G.S.R.No.270(E) dated 07.04.2014
G.S.R.No. 361 (E) dated 27.05.2014
G.S.R.No.370(E) dated 30.05.2014
G.S.R.No.371(E) dated 30.05.2014
G.S.R.No. 435 (E) dated 08.07.2014
G.S.R.No. 400 (E) dated 12.06.2014
G.S.R.No. 436 (E) dated 08.07.2014
G.S.R.No. 487 (E) dated 11.07.2014
G.S.R.No. 632 (E) dated 02.09.2014
G.S.R.No. 798 (E) dated 13.11.2014
G.S.R.No. 799 (E) dated 13.11.2014
G.S.R.No. 800 (E) dated 13.11.2014
G.S.R.No. 829 (E) dated 21.11.2014
G.S.R.No. 906(E) dated 22.12.2014
G.S.R.No. 914 (E) dated 24.12.2014
G.S.R.No. 30 (E) dated 14.01.2015
G.S.R.No. 183 (E) dated 12.03.2015
G.S.R.No. 284 (E) dated 13.04.2015
G.S.R.No. 484 (E) dated 11.06.2015
G.S.R.No. 745 (E) dated 30.09.2015
G.S.R.No. 759 (E) dated 06.10.2015
G.S.R.No. 823 (E) dated 30.10.2015
G.S.R.No. 858 (E) dated 16.11.2015
G.S.R.No. 983 (E) dated 17.12.2015
G.S.R.No. 165 (E) dated 15.02.2016G.S.R.No. 166 (E) dated 15.02.2016
G.S.R.No. 369 (E) dated 30.03.2016
G.S.R.No. 537 (E) dated 20.05.2016
G.S.R.No. 879 (E) dated 09.09.2016
G.S.R.No. 1015 (E) dated 27.10.2016
Published in the Official Gazette of Government of
India – Extraordinary – Part-II, Section 3,
Sub-Section (i) dated 04.11.2016- G.S.R.No.1042 (E)