Circular, CIR/IMD/FIIC/13/2014, dated 17th June,
2014
1. Pursuant to the Reserve Bank of
India (RBI) circular RBI/2013-14/632 dated June 06, 2014, it has been decided
as follows:
a) In terms of the RBI circular
A.P. (DIR Series) Circular No. 84 dated January 06, 2014, an Indian company is
permitted to issue non-convertible/redeemable preference shares or debentures
to non-resident shareholders, including the depositories that act as trustees
for the ADR/GDR holders by way of distribution as bonus from its general
reserves under a Scheme of Arrangement approved by a Court in India under the
provisions of the Companies Act, as applicable, subject to no-objection from
the Income Tax Authorities.
b) FPIs are permitted to invest on
repatriation basis, in non-convertible/redeemable preference shares or
debentures issued by an Indian company in terms of the above RBI circular and
listed on recognized stock exchanges in India.
c) The investments by FPIs in the
abovementioned securities shall be reckoned against the Corporate Debt
Investment Limits (US$ 51 billion).
This
circular shall come into effect immediately. This circular is issued in
exercise of powers conferred under Section 11 (1) of the Securities and
Exchange Board of India Act, 1992.
A
copy of this circular is available at the web page “Circulars” on our website www.sebi.gov.in.
Custodians are requested to bring the contents of this circular to the notice
of their FII clients.
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