| Schedule
5 – Purchase and sale of securities other than
shares/convertible debentures (CD) by non-residents
A
registered FII is permitted to purchase on repatriation
basis, dated Government Securities/Treasury Bills, non-convertible
debentures/bonds issued by an Indian company and units
of domestic mutual funds either directly from the issuer
of such securities or through a registered stock broker
on a recognized stock exchange in India; provided that
1)
A Non-resident Indian and Overseas Body is permitted,
without limit, to purchase on repatriation basis,
- Government
dated securities (other than bearer securities) or
Treasury Bills or units of domestic mutual funds;
- Bonds
issued by a public sector undertaking in India;
- Shares
in Public Sector Enterprises being dis-invested by
the Government of India, provided the purchase is
in accordance with the terms and conditions stipulated
in the notice inviting bids.
2)
A Non-resident Indian is permitted, without limit, to
purchase on non-repatriation basis, dated Government
Securities (other than bearer securities), Treasury
Bills, units of domestic mutual funds, units of Money
Market Mutual Funds in India, or National Plan/Savings
Certificates.
3)
A multilateral Development Bank which is specifically
permitted by Govt. of India to float Rupee Bonds in
India may purchase Govt. dated securities.
3.
Method of payment of purchase consideration
·
A
registered FII who purchases securities falling under
item 3(1) of schedule 5 shall make payment for purchase
of such securities either by inward remittance through
normal banking channels or out of funds held in Foreign
Currency Account or Non-resident Rupee Account maintained
by the FII with a designated branch of an authorised
dealer with the approval of Reserve Bank.
·
A
Non-resident Indian falling under item 3(2) of schedule
5 who purchases securities on repatriation basis, shall
make payment either by inward remittance through normal
banking channels or out of funds held in his/its NRE/FCNR
Account.
·
A
Non-resident Indian falling under item 3(3) of schedule
5 who purchases securities on non-repatriation basis,
shall make payment either by inward remittance through
normal banking channels or out of funds held in his/its
NRE/FCNR/NRO/ NRSR/ NRNR account.
A Multilateral Development which purchases Govt.
dated securities under this schedule 5 shall make payment
by inward remittance through normal banking channels
or out of funds held in account opened with a specific
approval of RBI.
4.
Permission for Sale of Securities
A
person resident outside India who has purchased securities
in accordance with schedule 5 is
permitted:
- to sell such securities through a registered stock
broker on a recognized stock exchange or
- to tender units of mutual funds to the issuer for
repurchase or for payment of maturity proceeds or
- to tender Government Securities/ Treasury Bills
to the Reserve Bank for payment of maturity proceeds.
5.
Remittance/credit of sale/maturity proceeds
- In
the case of a registered FII who has sold securities,
the designated branch of an authorised dealer may
allow remittance of net sale/maturity proceeds (after
payment of taxes) or credit the net amount of sale/maturity
proceeds of such securities to the Foreign Currency
Account or Non-resident Rupee Account of the FII investor.
- In
the case of a Non-resident Indian who has sold securities,
the net sale/maturity proceeds (after payment of taxes)
of such securities, may be:-
(a)
credited only to NRSR account of the NRI investor where
the payment for purchase of securities sold was made
out of funds held in NRSR account, or
(b)
credited,
at the NRI investor’s option, to his/its NRO or NRSR
account, where the payment for the purchase of the securities
sold was made out of funds held in NRO account, or
(c)
remitted
abroad or at the NRI investor’s option, credited to
his/its NRE/FCNR/ NRO /NRSR/NRNR account, where the
securities were purchased on repatriation basis and
the payment for purchase of the securities sold was
made by inward remittance through normal banking channels
or out of funds held in NRE/FCNR account.
·
In the case of Govt. dated securities by a multi development
bank the net maturity proceeds (after payment of taxes)
may be remitted abroad or credited to fund account opened
with the prior permission of RBI
The abbreviations FCNR, NRE, NRO, NRNR, and NRSR for
bank accounts have already been given in the previous
pages.
Schedule
6 – Investment in an Indian Venture Capital Undertaking
by a registered Foreign Venture Capital Investor
:
A
registered Foreign Venture Capital Investor (FVCI) may
through the SEBI apply to RBI for permission to invest
in Indian Venture Capital Undertaking (IVCU) or in a
VCF or in a scheme floated by such VCFs and upon consideration
RBI may permit the investment upon necessary conditions.
The registered FVCI permitted by RBI may purchase
equity/equity linked instruments/debts/debt instruments,
debentures of IVCU or of VCF through initial public
offer or private placement or in units of schemes/funds
setup by VCF.
The amount of consideration for investment in
VCFs /IVCUs shall be paid out of inward remittance from
abroad through normal banking channels or out of funds
held in an account maintained with the designated branch
of a authorized dealer in India.
Conditions
laid in para 2 to 5 of schedule 6 as to maintenance
of account, forward cover, by authorisd dealers, valuation
of investments and adherence
to SEBI guidelines should be strictly followed.
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