Reporting on FIRMS portal – Issuance of Partly Paid Units by Investment Vehicles

## Report on RBI Circular No. 06 - Issuance of Partly Paid Units by Investment Vehicles **1. Executive Summary:** This report analyzes Reserve Bank of India (RBI) Circular No. 06, dated May 23, 2025, which amends existing regulations regarding the issuance of partly paid units by investment vehicles to persons resident outside India. The key purpose of this amendment is to provide a grace period for reporting issuances of partly paid units made *prior* to the circular's date, allowing investment vehicles to report such issuances within 180 days without incurring late submission fees. The report details the amendment's provisions, identifies affected stakeholders, and infers likely implementation aspects and intended outcomes. **2. Introduction:** This report aims to provide a comprehensive overview of RBI Circular No. 06 (A.P. DIR Series), issued on May 23, 2025, concerning the reporting requirements for the issuance of partly paid units by investment vehicles, based solely on the information provided within the circular's text. **3. Policy Overview:** * **Amendment:** This circular constitutes an amendment to existing regulations. The circular references the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, amended in 2024, and the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019. * **Core Objective(s):** The core objective of *this specific amendment*, as inferred from the text, is to facilitate the reporting of previously unrecorded issuances of partly paid units by investment vehicles to persons resident outside India by providing a temporary window for compliance without penalties. **4. Background and Rationale:** * **Amendment Rationale:** The amendment likely addresses a situation where investment vehicles had issued partly paid units to persons resident outside India prior to the circular's date but had not yet reported these issuances through the FIRMS portal. This could be due to a lack of clarity in the original regulations, technical difficulties, or simply oversight. The amendment provides a limited-time opportunity to rectify these reporting omissions without incurring late submission fees, encouraging compliance. **5. Key Provisions / Changes:** * **Specific Part of Original Policy Changed:** While the circular doesn't explicitly state which specific regulation is being *directly* amended, it affects the enforcement of reporting timelines stipulated in the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, specifically Regulation 4(10) regarding Form InVI filing. * **New Rule/Provision:** The key change is the introduction of a grace period. Investment vehicles can report issuances of partly paid units made *prior* to May 23, 2025, in Form InVI within 180 days of the circular's date, without incurring late submission fees. * **Difference/Effect of Change:** This change effectively suspends the standard 30-day reporting timeline (with associated late fees) *for past issuances* of partly paid units. It incentivizes investment vehicles to come into compliance by waiving penalties for a limited time. Issuances occurring *on or after* the circular's date remain subject to the original 30-day reporting deadline. **6. Target Audience and Stakeholders:** The primary target audience is Category I Authorised Dealer (AD) banks, who are instructed to inform their customers. The key stakeholders directly affected are: * Investment vehicles that have issued or plan to issue partly paid units to persons resident outside India. * Persons resident outside India who hold partly paid units issued by Indian investment vehicles. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Reserve Bank of India (RBI) is the responsible regulatory body. Authorised Dealer (AD) Category I banks are responsible for disseminating the information to their constituents. * **Timelines:** * Issuances made *prior* to May 23, 2025: Report within 180 days of May 23, 2025 (i.e., by November 19, 2025) to avoid late fees. * Issuances made *on or after* May 23, 2025: Report within 30 days of the issuance date, as per existing regulations. * **Procedure:** Investment vehicles must report the issuance of partly paid units using Form InVI on the FIRMS portal. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of these changes is: * Increased compliance in the reporting of partly paid unit issuances by investment vehicles. * A more accurate record of foreign investment in Indian investment vehicles held in the FIRMS database. * Avoidance of penalties for past non-compliance, encouraging investment vehicles to rectify any previous omissions. **9. Conclusion:** RBI Circular No. 06 provides a temporary grace period for reporting previously unrecorded issuances of partly paid units, simplifying compliance and improving the accuracy of foreign investment data. This amendment targets investment vehicles and AD Category I banks, requiring them to report past issuances within 180 days to avoid penalties. It is a significant step toward ensuring better compliance with reporting requirements under the Foreign Exchange Management Act.

Key Entities Referenced