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Date: 2014-07-11 Category: Extra Ordinary State: Union Government Country: India

These Regulations shall be called the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) (Second Amendment) Regulations, 2014.

Issued by Reserve Bank of India · Foreign Exchange Department

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Executive Summary & Key Takeaways

Executive Summary: This document outlines amendments to the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations of 2004. The amendments, effective from the date of publication in the Official Gazette, concern reporting requirements, investment procedures, and permission protocols related to overseas direct investments. It primarily focuses on changes to Form ODI submission guidelines and valuation requirements for investments. Key Points / Main Content: Reporting Requirements: * Indian Parties must submit Annual Performance Reports (APR) for all overseas investments in Part III of Form ODI, as prescribed by the Reserve Bank. * Indian Parties must submit Part I of Form ODI to the designated branch of an authorized dealer. * Indian Parties must file Parts I and II of the Form ODI with the designated authorized dealer, detailing proposed investments. * Authorized dealers may allow remittances for foreign company acquisition, subject to Regulation 6 ceilings. The Indian Party must then submit a report to the Reserve Bank in Parts I and II of Form ODI within 30 days of the final remittance. * Winning bidders must report to the Reserve Bank in Parts I and II of Form ODI within 30 days of the final remittance. Investment Procedures: * Applications for direct investment in Joint Ventures or Wholly Owned Subsidiaries outside India, or via share exchange of a foreign company, shall be made in Part I of Form ODI, as prescribed by the Reserve Bank. * For investments via remittance in existing foreign companies, valuation of shares is required: * Investments over USD 5 million require valuation by a Category I Merchant Banker registered with SEBI or an equivalent Investment Banker in the host country. * All other cases require valuation by a Chartered Accountant or Certified Public Accountant. * For investment by acquisition of shares of an existing company outside India, where consideration is paid fully/partly by issuing the Indian party’s shares, valuation must be done by a Category I Merchant Banker registered with SEBI or an equivalent Investment Banker in the host country. Permissions: * For bidding/tender participation in acquiring a company outside India (not under subregulation 1), the Reserve Bank may allow foreign exchange remittance for earnest money deposit or allow the authorized dealer to issue a bid bond guarantee upon application in Form ODI. * If an investment does not conform to Part I Regulations or differs from approved terms under subregulation 3, the Indian Party must apply to the Reserve Bank in Form ODI for FDI approval as specified in Regulation 9. * Proprietary concerns in India may apply to the Reserve Bank through an authorized dealer in Part I of the Form ODI to accept shares of a company outside India for professional services rendered. * Share value cannot exceed 50% of fees receivable from the foreign company. * The Indian concern's shareholding cannot exceed 10% of the paid-up capital of the foreign company. Schedule V Amendments: * Resident individuals making overseas direct investments must submit Part I of Form ODI to the designated authorized dealer within 30 days of remittance. * The designated authorized dealer must report the investment to the Reserve Bank in Form ODI Parts I and II within 30 days of remittance. * The designated AD may report disinvestment by the resident individual to the Reserve Bank in Part IV of Form ODI within 30 days of receipt of disinvestment proceeds. Impact Analysis: Indian Parties (Companies/Firms): Impact: Changes in reporting formats (Form ODI), valuation requirements for overseas investments, and procedures for seeking approvals for investments and acceptance of shares. Action Required: Comply with the updated Form ODI submission requirements, ensure proper valuation of shares for investments, and adhere to the revised permission protocols. Authorized Dealers: Impact: Changes in reporting requirements to the Reserve Bank and revised procedures for allowing remittances and issuing bid bonds/guarantees. Action Required: Familiarize themselves with the updated Form ODI formats and reporting timelines, and comply with the revised procedures for processing overseas investment transactions. Resident Individuals: Impact: Revised reporting requirements for overseas direct investments under Schedule V. Action Required: Submit Part I of Form ODI to the designated authorized dealer within 30 days of remittance, and ensure disinvestments are reported in Part IV of Form ODI within 30 days of receipt of proceeds. Reserve Bank of India: Impact: Amended regulations related to foreign exchange management, requiring updates to internal processes and oversight of compliance. Action Required: Implement the changes, monitor compliance, and provide guidance to stakeholders as needed.

Key Entities Referenced

Reserve Bank of India: The central bank of India, responsible for regulating the foreign exchange market and related activities. 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 any Foreign Security Regulations, 2004: Regulations issued by the Reserve Bank of India governing the transfer or issue of foreign securities. Form ODI: A form prescribed by the Reserve Bank of India for reporting overseas direct investments. Annual Performance Report APR: A report to be submitted to the Reserve Bank of India, through the designated Authorised Dealer, every year on or before a specified date Mumbai, Maharashtra: The city in India where the Reserve Bank of India's Central Office is located. Securities and Exchange Board of India (SEBI): The regulator of the securities market in India. Foreign Exchange Management Transfer or Issue of any Foreign Security Second Amendment Regulations, 2014: The specific amendment regulations being published in the Gazette of India.
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L.-33004/99 vlk/kj.k EXTRAORDINARY Hkkx II—[k.M 3—mi&[k.M (i) PART II—Section 3—Sub-section (i) izkf/dkj ls izdkf'kr PUBLISHED BY AUTHORITY la. 357] ubZ fnYyh] 'kqØokj] tqykbZ 11] 2014@vk"kk<+ 20] 1936 No. 357] NEW DELHI, FRIDAY, JULY 11, 2014/ASHADHA 20, 1936 भभभभााााररररततततीीीीयययय (cid:1)(cid:1)(cid:1)(cid:1)ररररज़ज़ज़ज़वववव (cid:5)(cid:5) (cid:5)(cid:5)बबबबकक(cid:7)(cid:7)कक(cid:7)(cid:7) ((((ििििववववददददेेशशेेशशीीीी मममम(cid:3)(cid:3)ुु(cid:3)(cid:3)ुु ाााा ििििववववभभभभाााागगगग)))) ((((कककक(cid:6)(cid:6)(cid:6)(cid:6)(cid:3)(cid:3)(cid:3)(cid:3)ीीीीयययय ककककााााययययाााालल(cid:9)(cid:9)लल(cid:9)(cid:9) यययय)))) अअअअििििधधधधससससचचूूचचूू ननननाााा मुंबई, 3 जुलाई, 2014 ((((सससस-ंंंं फफफफेेेेममममाााा 333311114444////आआआआररररबबबबीीीी-2222000011114444)))) ििििववववददददेशेशेशेशीीीी मममम(cid:11)(cid:11)ुु(cid:11)(cid:11)ुु ाााा (cid:13)(cid:13)(cid:13)(cid:13)बबबबधधंंधधंं (((((cid:16)(cid:16)(cid:16)(cid:16)ककककससससीीीी ििििववववददददेशेशेशेशीीीी 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(cid:13)(cid:13)(cid:13)(cid:13)ााााररररंंंंभभभभ (i) ये िविनयम, िवदेशी मु(cid:3)ा (cid:5)बंध ((cid:30)कसी िवदेशी (cid:5)ितभूित का अतं रण अथवा िनग(cid:27)म) (दसू रा संशोधन) िविनयमावली, 2014 कहलाएंगे। (ii) वे सरकारी राजप, म %उनके (cid:5)काशन क(cid:10) तारीख से लाग ूह(cid:19)गे। 2835 GI/2014 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] 2222.... ििििववववििििननननययययमममम 6666 मममम (cid:27)(cid:27) (cid:27)(cid:27)ससससशशंंशशंं ोोोोधधधधनननन ए. उप-िविनयम (2) म,% मौजूदा खंड (iv) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "( ) भारतीय पाट2 ने, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4 फाम (cid:27) ओडीआई के भाग म % (cid:30)दए गए iv III फाम6ट म,% अपन ेसभी समु(cid:3)पारीय िनवेश(cid:19) के संबंध म %वा7षक िन9पादन (cid:24)रपोट (cid:27)(cid:5)0तुत क(cid:10) ह।ै " बी. उप-िविनयम (2) म,% मौजूदा खंड (vi) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(vi) भारतीय पाट2, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4 फाम(cid:27) ओडीआई के भाग को िविधवत पूरा I करके (cid:5)ािधकृत ;ापारी क(cid:10) नािमत शाखा को (cid:5)0तुत करती ह।ै " सी. उप-िविनयम (5) म,% मौजूदा खंड (बी) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(बी) भारतीय पाट2 (cid:5)0तािवत िनवेश(cid:19) के पूरे <योरे, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4 फाम(cid:27) ओडीआई के भाग और म % नािमत (cid:5)ािधकृत ;ापारी के पास फाइल करती ह।ै " I II 3333.... ििििववववििििननननययययमममम 9999 मममम (cid:27)(cid:27) (cid:27)(cid:27)ससससशशंंशशंं ोोोोधधधधनननन ए. मौजूदा उप-िविनयम (2) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(2) भारत से बाहर (cid:30)कसी संयु(cid:17) उ>म/पूण (cid:27) 0वािम@व वाली सहायक कंपनी म,% अथवा (cid:30)कसी िवदेशी कंपनी के शेयर(cid:19) के िविनमय के माफ(cid:27)त (cid:30)कए जाने वाले (cid:5)@यA िनवेश(cid:19) से संबंिधत आवेदन, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4, फाम(cid:27) ओडीआई के भाग म %(cid:30)कए जाएंगे।" I बी. मौजूदा उप-िविनयम (2ए) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(2ए) समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4, फाम (cid:27) ओडीआई म % उप-िविनयम (2) के अंतगत(cid:27) (cid:30)कया गया कोई आवेदन प, ।" (ए) भारत से बाहर क(cid:10) (cid:30)कसी वत(cid:27)मान कंपनी म % भारत से िव(cid:5)ेषण (cid:11)ारा िनवेश करन े के (cid:5)योजन हते ु भारत से बाहर क(cid:10) संबंिधत कंपनी के शेयर(cid:19) के िन& नवत (cid:22)ए मूBय िनधा(cid:27)रण को संलCन (cid:30)कया जाएगा— (i) जहां िनवेश 5 (पांच) िमिलयन अमरीक(cid:10) डालर से अिधक हो, वहां शेयर(cid:19) का मूBय िनधा(cid:27)रण सेबी के पास पंजीकृत (cid:30)कसी Dेणी- मचFट ब(cid:28)कर अथवा मेजबान देश के उिचत िविनयामक (cid:5)ािधकारी के पास पंजीकृत I िनवेश ब(cid:28)कर/मचFट ब(cid:28)कर (cid:11)ारा (cid:30)कया जाएगा; और (ii) सभी अGय मामल(cid:19) म % (cid:30)कसी सनदी लेखाकार अथवा (cid:5)मािणत लोक लेखाकार (cid:11)ारा (cid:30)कया जाएगा। (बी) भारत से बाहर क(cid:10) वत(cid:27)मान कंपनी के शेयर(cid:19) के अज(cid:27)न के माफ(cid:27)त िनवेश के (cid:5)योजन हते ु जहां भारतीय पाट2 के िलए शेयर पूण(cid:27)त: अथवा अंशत: (cid:5)ितफल रािश क(cid:10) (cid:5)ािI पर जारी (cid:30)कए ह(cid:19)ग,े वहां शेयर(cid:19) का मूBय िनधा(cid:27)रण सेबी के पास पंजीकृत (cid:30)कसी Dेणी- मचFट ब(cid:28)कर अथवा मेजबान देश के उिचत िविनयामक (cid:5)ािधकारी के पास पंजीकृत िनवेश I ब(cid:28)कर/ मचFट ब(cid:28)कर (cid:11)ारा (cid:30)कया जाएगा। 4444.... ििििववववििििननननययययमममम 11114444 मममम (cid:27)(cid:27) (cid:27)(cid:27)ससससंशंशंशंशोोोोधधधधनननन ए. मौजूदा उप-िविनयम (2) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(2) भारतीय पाट2 (cid:11)ारा नीलामी म % सफल बोली लगान े पर—¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 3 (i) (cid:5)ािधकृत ;ापारी िवदेशी कंपनी के अज(cid:27)न (acquisition) के िलए और िव(cid:5)ेषण क(cid:10) अनुमित, िविनयम 6 म % िविन3द4 उJतम सीमा, के अंतग(cid:27)त दे सकते ह;(cid:28) और भारतीय पाट2 अंितम िव(cid:5)ेषण करन े से 30 (cid:30)दन(cid:19) के भीतर, अपन े संबंिधत नािमत (cid:5)ािधकृत ;ापारी के (ii) माKयम से, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4, फाम (cid:27) ओडीआई के भाग और म % (cid:24)रजव (cid:27) I II ब(cid:28)क को (cid:24)रपोट (cid:27)(cid:5)0तुत करेगी।" बी. मौजूदा उप-िविनयम (3) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(3) भारत से बाहर िनगिमत (cid:30)कसी कंपनी, जो उप-िविनयम (1) म % नहL आती ह,ै के अज(cid:27)न हते ु उसक(cid:10) नीलामी अथवा ट%डर (cid:5)(cid:30)Nया म % भाग लेने के िलए, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4 फाम (cid:27) ओडीआई म % आवेदन (cid:30)कए जाने पर, (cid:24)रज़व (cid:27) ब(cid:28)क (cid:11)ारा िविन3द4 शतO के तहत, बयाना जमा रािश के िलए िवदेशी मु(cid:3)ा के िव(cid:5)ेषण अथवा नीलामी हते ु भारत ि0थत (cid:5)ािधकृत ;ापारी को बांड गारंटी जारी करन े क(cid:10) अनुमित (cid:24)रज़व (cid:27) ब(cid:28)क (cid:11)ारा दी जा सकती ह।ै " सी. उप-िविनयम (4) म,% मौजूदा खंड (ए) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(ए) भाग म % उिBलिखत िविनयम(cid:19) के उपबंध(cid:19) के अनुQप न होने, अथवा उप-िविनयम (3) के अंतगत(cid:27) िलए गए I अनुमोदन से िभR होने पर, भारतीय पाट2 िविनयम 9 म % िविन3द4 रीित से (cid:5)@यA िवदेशी िनवेश करन े के िलए अनुमित (cid:5)दान करने हते ु, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3दषट् , फाम (cid:27) ओडीआई म % (cid:24)रजव (cid:27) ब(cid:28)क को अपना आवेदन प, (cid:5)0तुत करेगी, अथवा" 5555.... ििििववववििििननननययययमममम 11115555 मममम (cid:27)(cid:27) (cid:27)(cid:27)ससससंशंशंशंशोोोोधधधधनननन मौजूदा उप-िविनयम ( ) िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् iii "( ) समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4, फाम (cid:27) ओडीआई के भाग म % भारत से बाहर के (cid:5)@येक iii III संयु(cid:17) उ>म अथवा पूण (cid:27) 0वािम@व वाली सहायक कंपनी के संबंध म % एक वा7षक (cid:24)रपोट (cid:27) (cid:5)ित वष (cid:27) िविन3द4 तारीख से पूव (cid:27) या तक और (cid:24)रज़व(cid:27) ब(cid:28)क (cid:11)ारा समय-समय पर िविन3द4 अGय (cid:24)रपोट F अपन े नािमत (cid:5)ािधकृत ;ापारी के माKयम से (cid:24)रज़व (cid:27) ब(cid:28)क को (cid:5)0ततु करेगी। जब तक (cid:30)क (cid:24)रज़व (cid:27) ब(cid:28)क ने िवशेष Qप से छूट न दी हो, अपेिAत वा7षक (cid:24)रपोट (cid:27) संयु(cid:17) उ>म/पूण (cid:27)0वािम@व वाली सहायक कंपनी के िवगत वष (cid:27)के लेखापरीिAत वा7षक लेख(cid:19) पर आधा(cid:24)रत होनी चािहए।" 6666.... ििििववववििििननननययययमममम 11119999 मममम (cid:27)(cid:27) (cid:27)(cid:27)ससससंशंशंशंशोोोोधधधधनननन मौजूदा िविनयम 19 िन& निलिखत से (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् """"11119999.... भभभभााााररररतततत मममम (cid:27)(cid:27) (cid:27)(cid:27)(cid:16)(cid:16)(cid:16)(cid:16)ककककससससीीीी ममममााााििििललललककककााााननननाााा (cid:13)(cid:13)(cid:13)(cid:13)िििितततत(cid:28)(cid:28)(cid:28)(cid:28)ाााानननन (cid:29)(cid:29)(cid:29)(cid:29)ाााारररराााा शशशशययेेययेे रररर!!!! ककककेेेे """"ववववीीीीककककररररनननन ेेेेककककेेेे ििििललललएएएए (cid:1)(cid:1)(cid:1)(cid:1)ररररज़ज़ज़ज़वववव (cid:5)(cid:5) (cid:5)(cid:5)बबबबकक(cid:7)(cid:7)कक(cid:7)(cid:7) कककक#### पपपपववूूववूू ाााानन(cid:5)(cid:5)नन(cid:5)(cid:5) ममुुममुु िििितततत (cid:13)(cid:13)(cid:13)(cid:13)ाााा(cid:26)(cid:26)(cid:26)(cid:26) ककककररररना भारत का कोई मािलकाना (cid:5)ितUान अपनी कंपनी (cid:11)ारा दी गई पेशेवर सेवाV के िलए (cid:5)ाWय फ(cid:10)स के बदले भारत से बाहर क(cid:10) कंपनी से शेयर 0वीकार करन े के िलए, समय-समय पर भारतीय (cid:24)रज़व(cid:27) बकैँ (cid:11)ारा िविन3द4 फाम (cid:27) ओडीआई के भाग म % अपन े (cid:5)ािधकृत ;ापारी ब(cid:28)क के माKयम से िलए (cid:24)रज़व (cid:27) ब(cid:28)क से पूवा(cid:27)नुमित (cid:5)ाI करन े के िलए I आवेदन कर सकती ह।ै4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] बशत 6 (cid:30)क (ए) भारत से बाहर क(cid:10) (cid:5)@येक कंपनी से 0वीकार (cid:30)कए गए शेयर(cid:19) का मूBय भारतीय (cid:5)ितUान (cid:11)ारा (cid:5)ाI क(cid:10) जाने वाली फ(cid:10)स के पचास (cid:5)ितशत से अिधक नहL होगा और (बी) उBलेखानुसार, भारतीय (cid:5)ितUान (cid:11)ारा भारत से बाहर क(cid:10) (cid:30)कसी भी कंपनी क(cid:10) 0वीकार क(cid:10) गई शेयरधा(cid:24)रता, उ(cid:17) कंपनी के 0वीकार (cid:30)कए गए शेयर(cid:19) के कारण भारत से बाहर क(cid:10) संबंिधत कंपनी क(cid:10) (cid:5)द(cid:14) पूंजी के दस (cid:5)ितशत से अिधक नहL होगी।" 7777.... अअअअननननससुुससुु चचूूचचूू ीीीी V मममम (cid:27)(cid:27) (cid:27)(cid:27)ससससशशंंशशंं ोोोोधधधधनननन अनुसूची V म,% पैरा "डी" म,% — ए. पैरा (1) के िलए, िन& निलिखत (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(1) इस अनुसूची के उपबंध(cid:19) के तहत (cid:30)कसी िनवासी ;ि(cid:17) (cid:11)ारा (cid:30)कए गए समु(cid:3)पारीय (cid:5)@यA िनवेश, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4, फाम (cid:27) ओडीआई के भाग म % िविधवत भर कर, िव(cid:5)ेषण करने से 30 (cid:30)दन(cid:19) के I भीतर, नािमत (cid:5)ािधकृत ;ापारी को (cid:5)0तुत (cid:30)कए जाएंगे।" बी. पैरा (2) के िलए, िन& निलिखत को (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(2) (cid:30)कसी िनवासी ;ि(cid:17) (cid:11)ारा (cid:30)कए गए िनवेश, िव(cid:5)ेषण (cid:30)कए जाने से 30 (cid:30)दन(cid:19) के भीतर, समय-समय पर भारतीय (cid:24)रज़व (cid:27) बकैँ (cid:11)ारा िविन3द4, फाम (cid:27) ओडीआई के भाग और म % नािमत (cid:5)ािधकृत ;ापारी (cid:11)ारा (cid:24)रज़व (cid:27) ब(cid:28)क I II को (cid:24)रपोट (cid:27)(cid:30)कए जाएंगे।" सी. पैरा (4) के िलए, िन& निलिखत को (cid:5)ित0थािपत (cid:30)कया जाएगा, अथात(cid:27) : ् "(4) (cid:30)कसी िनवासी ;ि(cid:17) (cid:11)ारा (cid:30)कए गए िविनवेश, समय-समय पर भारतीय (cid:24)रज़व (cid:27) cSad (cid:11)ारा िविन3द4, फाम (cid:27) ओडीआई के भाग म % नािमत (cid:5)ािधकृत ;ापारी ब(cid:28)क (cid:11)ारा िविनवेश क(cid:10) आगम रािश क(cid:10) (cid:5)ािI से 30 (cid:30)दन(cid:19) के IV भीतर (cid:24)रज़व (cid:27) ब(cid:28)क को (cid:24)रपोट (cid:27) (cid:30)कए जाएंगे।" ¹iQk la- 1@26@bZ,e@2014º सी. डी. Dीिनवासन, मुXय महा(cid:5)बंधक पपपपाााादददद (cid:1)(cid:1)(cid:1)(cid:1)टटटट&&&&पपपपणणणणीीीी :::: मूल िविनयमावली भारत सरकार के सरकारी राजपत्र के भाग , खंड 3, उप-खंड () म % 19 नवंबर, 2004 के II i सा....का....िन.... सं. 757(अ) (cid:11)ारा (cid:5)कािशत और तदपु रांत िन&न िलिखत (cid:11)ारा संशोिधत क(cid:10) गई :— सा....का....िन.... सं. 220(अ) (cid:30)दनांक अ(cid:5)ैल 7, 2005, सा....का....िन.... सं. 337(अ) (cid:30)दनांक मई 27, 2005, सा....का....िन.... सं. 552(अ) (cid:30)दनांक अगस्त 31, 2005, सा....का....िन.... सं. 535(अ) (cid:30)दनांक िसतंबर 6, 2006, सा....का....िन.... सं.13(अ) (cid:30)दनांक जनवरी 5, 2008, सा....का....िन.... सं. 209(अ) (cid:30)दनांक माच (cid:27) 25, 2008, सा....का....िन.... सं. 676(अ) (cid:30)दनांक िसतंबर 24, 2008,¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 5 सा....का....िन.... सं. 756(अ) (cid:30)दनांक अ(cid:17)ूबर 31, 2008, सा....का....िन.... सं. 108(अ) (cid:30)दनांक फरवरी 20, 2009, सा....का....िन.... सं. 301(अ) (cid:30)दनांक मई 1, 2009, सा....का....िन.... सं. 441(अ) (cid:30)दनांक जून 23, 2009, सा....का....िन.... सं.609(अ) (cid:30)दनांक अग0त 28, 2009, सा....का....िन.... सं. 607(अ) (cid:30)दनांक अग0त 3, 2012, सा....का....िन.... सं. 609(अ) (cid:30)दनांक अग0त 3, 2012, सा....का....िन.... सं. 947(अ) (cid:30)दनांक (cid:30)दसंबर 31, 2012, सा....का....िन.... सं. 345(अ) (cid:30)दनांक मई 29, 2013, सा....का....िन.... सं. 516(अ) (cid:30)दनांक जुलाई 30, 2013, सा....का....िन.... सं. 529(अ) (cid:30)दनांक अग0त 05, 2013, सा....का....िन.... सं. 552(अ) (cid:30)दनांक अग0त 14, 2013 और सा....का....िन.... सं. 323(अ) (cid:30)दनांक मई 07, 2014. RESERVE BANK OF INDIA (Foreign Exchange Department) (CENTRAL OFFICE) NOTIFICATION Mumbai, the 3rd July, 2014 (No. FEMA 314/RB-2014) Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Second Amendment) Regulations, 2014 G.S.R. 489(E).—In exercise of the powers conferred by clause (a) of sub-section (3) of Section 6 and sub- section (2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank hereby makes the following amendments in the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 (Notification No. FEMA.120/RB-2004 dated July 7, 2004), as amended from time to time, (hereinafter called the Principal Regulations or the Notification) namely :— 1. Short Title and Commencement:—(i) These Regulations shall be called the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) (Second Amendment) Regulations, 2014. (ii) They shall come into force from the date of publication in the Official Gazette. 2. Amendment to Regulation 6 A. In sub-regulation (2), the existing clause (iv) shall be substituted with the following, namely: “(iv) The Indian Party has submitted Annual Performance Report in respect of all its overseas investments in the format given in Part III of the Form ODI, as prescribed by the Reserve Bank from time to time.” B. In sub-regulation (2), the existing clause (vi) shall be substituted with the following, namely: “(vi) The Indian Party submits duly completed Part I of the Form ODI, as prescribed by the Reserve Bank from time to time, to the designated branch of an authorised dealer.”6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] C. In sub-regulation (5), the existing clause (b) shall be substituted with the following, namely: “(b) The Indian Party files with the designated authorised dealer in Parts I and II of the Form ODI, as prescribed by the Reserve Bank from time to time, full details of the investment proposed.” 3. Amendment to Regulation 9 A. The existing sub-regulation (2) shall be substituted with the following, namely: “(2) Application for direct investment in Joint Venture / Wholly Owned Subsidiary outside India, or by way of exchange for shares of a foreign company, shall be made in Part I of the Form ODI, as prescribed by the Reserve Bank from time to time.” B. The existing sub-regulation (2A) shall be substituted with the following, namely: “(2A) An application made under sub-regulation (2) in Form ODI, as prescribed by the Reserve Bank from time to time (a) for the purpose of investment by way of remittance from India, in an existing company outside India, shall be accompanied, by the valuation of shares of the company outside India, made- (i) where the investment is more than USD 5 (five) million, by a Category I Merchant Banker registered with SEBI or an Investment Banker / Merchant Banker registered with the appropriate regulatory authority in the host country; and (ii) in all other cases, by a Chartered Accountant or a Certified Public Accountant. (b) for the purposes of investment by acquisition of shares of an existing company outside India where the consideration is to be paid fully or partly by issue of the Indian party’s shares, shall be accompanied by the valuation carried out by a Category I Merchant Banker registered with the SEBI or an Investment Banker / Merchant Banker registered with the appropriate regulatory authority in the host country. 4. Amendment to Regulation 14 A. The existing sub-regulation (2) shall be substituted with the following, namely: “(2) On the Indian party winning the bid, (i) the authorised dealer may allow further remittances towards acquisition of the foreign company, subject to the ceilings specified in Regulation 6; and (ii) The Indian Party shall submit, through the designated authorised dealer concerned, a report to the Reserve Bank in Parts I and II of the Form ODI, as prescribed by the Reserve Bank from time to time, within 30 days of effecting the final remittance.” B. The existing sub-regulation (3) shall be substituted with the following, namely: “(3) For participation in bidding or tender procedure for acquisition of a company incorporated outside India which does not fall within the provisions of sub-regulation (1), the Reserve Bank may, on application in Form ODI, as prescribed by the Reserve Bank from time to time, allow remittance of foreign exchange towards earnest money deposit or permit the authorised dealer in India to issue a bid bond guarantee, subject to such terms and conditions as the Reserve Bank may stipulate.” C. In sub-regulation (4), the existing clause (a) shall be substituted with the following, namely: “(a) not in conformity with the provisions of Regulations in Part I, or different from those for which approval under sub-regulation (3) was obtained, the Indian Party shall submit application in Form ODI, as prescribed by the Reserve Bank from time to time, to Reserve Bank for obtaining approval for the foreign direct investment in the manner specified in Regulation 9, or” 5. Amendment to Regulation 15 The existing sub-regulation (iii) shall be substituted with the following, namely: “(iii) submit to the Reserve Bank, through the designated Authorised Dealer, every year on or before a specified date, an Annual Performance Report (APR) in Part III of Form ODI, as prescribed by the Reserve Bank from time to time, in respect of each JV or WOS outside India, and other reports or documents as may be prescribed by the Reserve Bank from time to time. The APR, so required to be submitted, has to be based on the audited annual accounts of the JV / WOS for the preceding year, unless specifically exempted by the Reserve Bank.”¹Hkkx IIµ[k.M 3(i)º Hkkjr dk jkti=k % vlk/kj.k 7 6. Amendment to Regulation 19 The existing Regulation 19 shall be substituted with the following, namely: “19. Prior Permission of the Reserve Bank for a Proprietary Concern in India to accept shares A proprietary concern in India may apply to the Reserve Bank through the authorised dealer in Part I of the Form ODI, as prescribed by the Reserve Bank from time to time, for permission to accept shares of a company outside India in lieu of fees due to it for professional services rendered to the said company. Provided that (a) the value of the shares accepted from each company outside India shall not exceed fifty per cent of the fees receivable by the Indian concern from that company and (b) the Indian concern’s shareholding in any one company outside India by virtue of shares accepted as aforesaid shall not exceed ten per cent of the paid-up capital of the company outside India, whose shares are accepted.” 7. Amendment to Schedule V In Schedule V, in para ‘D’, A. for the para (1), the following shall be substituted, namely: “(1) The resident individual, making overseas direct investments under the provisions of this Schedule, submits duly completed Part I of the Form ODI, as prescribed by the Reserve Bank from time to time, to the designated authorised dealer, within 30 days of making the remittance.” B. for the para (2), the following shall be substituted, namely: “(2) The investment, as made by a resident individual, shall be reported by the designated authorised dealer to the Reserve Bank in Form ODI Part I and II, as prescribed by the Reserve Bank from time to time, within 30 days of making the remittance.” C. for the para (4), the following shall be substituted, namely: “(4) The disinvestment by the resident individual may be reported by the designated AD to the Reserve Bank in Part IV of Form ODI, as prescribed by the Reserve Bank from time to time, within 30 days of receipt of disinvestment proceeds.” [F. No. 1/26/EM/2014] C.D. SRINIVASAN, Chief General Manager Foot Note : The Principal Regulations were published in the Official Gazette of GOI vide G.S.R. No 757(E) dated November 19, 2004 – in Part II, Section 3, Sub-section (i) and subsequently amended vide :— G.S.R. No. 220(E) dated April 7, 2005, G.S.R. No. 337(E) dated May 27, 2005, G.S.R. No. 552(E) dated August 31, 2005, G.S.R. No. 535(E) dated September 6, 2006, G.S.R. No.13(E) dated January 5, 2008, G.S.R. No. 209(E) dated March 25, 2008, G.S.R. No.676(E) dated September 24, 2008, G.S.R. No.756(E) dated October 31, 2008, G.S.R. No.108(E) dated February 20, 2009, G.S.R. No. 301(E) dated May 1, 2009, G.S.R. No. 441(E) dated June 23, 2009, G.S.R. No. 609(E) dated August 28, 2009, G.S.R. No. 607(E) dated August 3, 2012, G.S.R. No. 609(E) dated August 3, 2012, G.S.R. No. 947(E) dated December 31, 2012, G.S.R. No. 345(E) dated May 29, 2013, G.S.R. No. 516(E) dated July 30, 2013, G.S.R. No. 529(E) dated August 05, 2013, G.S.R. No. 552(E) dated August 14, 2013 and G.S.R. No. 323(E) dated May 07, 2014. Printed by the Manager, Government of India Press, Ring Road, Mayapuri, Ne w Delhi.110064 and Published by the Controller of Publications, Delhi.110054.

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