ANNOUNCEMENT 09 Jan 2014

In January 2014, the government of India announced changed rules for foreign investors.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising
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 SECTORS

 
N/A

AFFECTED PRODUCTS

 
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