IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 09 Jan 2014 | Removal date: open ended
Still in force

FDI: Entry and ownership rule

On 9 January 2014, the Reserve Bank of India (RBI) amended the regulations for issue or transfer of a security by a person resident outside India. With the new amendment, an "optionality clause" is allowed to be included in the shares/debentures issued to such a person. It may be noted that only equity shares or compulsorily and mandatorily convertible preference shares/debentures are elgible to be issued to persons resident outside India under the FDI policy.
 
Conditions under the new clause:

  • The optionality clause will oblige the buy-back of the securities from the investor a the price prevailing/value determined when the optionality is exercised.
  • There is a minimum lock-in period of one year or as prescribed by the regulations for specific sectors, whichever is higher.
  • There are guidelines for pricing of a listed or unlisted stock or convertible preferences shares/debentures specified in the notification.

 

AFFECTED COUNTRIES

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