This document, *S.O. 3722(E)*, issued by the Ministry of Finance, Department of Economic Affairs, Government of India, on October 16, 2019, defines specific financial instruments as either "debt instruments" or "non-debt instruments" under subsection 7 of section 6 of the Foreign Exchange Management Act, 1999.
The following are determined to be debt instruments: Government bonds; corporate bonds; all tranches of securitization structures excluding the equity tranche; borrowings by Indian firms through loans; and depository receipts whose underlying securities are debt securities.
The following are determined to be non-debt instruments: All investments in equity in incorporated entities (public, private, listed, and unlisted); capital participation in Limited Liability Partnerships (LLPs); all instruments of investment as recognized in the FDI policy; investment in units of Alternative Investment Funds (AIFs), Real Estate Investment Trusts (REITs), and Infrastructure Investment Trusts (InVITs); investment in units of mutual funds and Exchange-Traded Funds (ETFs) which invest more than fifty percent in equity; the juniormost layer (equity tranche) of securitization structures; acquisition, sale, or dealing directly in immovable property; contribution to trusts; and depository receipts issued against equity instruments.
Any instruments not explicitly defined in the notification are to be considered debt instruments.
The notification was issued by Anand Mohan Bajaj, Joint Secretary.
Key Entities Referenced
New Delhi: Place of publication of the Gazette notification.
Foreign Exchange Management Act, 1999: Law under which the powers are conferred to determine debt instruments.
Central Government: The entity determining the instruments as debt instruments as per the notification.
Government bonds: Determined as debt instrument.
corporate bonds: Determined as debt instrument.
Alternative Investment Funds AIFs: Mentioned as a non-debt instrument.
Real Estate Investment Trust REITs: Mentioned as a non-debt instrument.
Infrastructure Investment Trusts InVITs: Mentioned as a non-debt instrument.
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5383 GI/2019 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)]
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[फा. सं. 1/14/ईएम/2015]
आन(cid:12)द मोहन बजाज, संयु! सिचव
MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 16th October, 2019
S.O. 3722(E).—In exercise of the powers conferred by sub-section (7) of section 6 of the Foreign
Exchange Management Act, 1999 (42 of 1999), the Central Government hereby determines the following
instruments as debt instruments, namely:—
(i) Government bonds;
(ii) corporate bonds;
(iii) all tranches of securitisation structure which are not equity tranche;
(iv) borrowings by Indian firms through loans;
(v) depository receipts whose underlying securities are debt securities.
2. Instruments specified below shall be considered as non-debt instruments, namely:-
(i) all investments in equity in incorporated entities (public, private, listed and unlisted);
(ii) capital participation in Limited Liability Partnerships (LLPs);
(iii) all instruments of investment as recognised in the FDI policy as notified from time to time;
(iv) investment in units of Alternative Investment Funds (AIFs) and Real Estate Investment Trust (REITs)
and Infrastructure Investment Trusts (InVITs);
(v) investment in units of mutual funds and Exchange-Traded Fund (ETFs) which invest more than fifty
per cent in equity;
(vi) the junior-most layer (i.e. equity tranche) of securitisation structure;
(vii) acquisition, sale or dealing directly in immovable property;
(viii) contribution to trusts;
(ix) depository receipts issued against equity instruments.
3. All other instruments which are not specified in paragraphs (1) and (2) above, shall be deemed as debt
instruments.
[F.No. l/14/EM/2015]
ANAND MOHAN BAJAJ, Jt. Secy.
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.