ACQUISITION OF FOREIGN SECURITIES BY
RESIDENT INDIVIDUALS UNDER ESOP SCHEME
Acquisition of Foreign Securities by
Resident Individuals under ESOP Scheme
Attention of Authorised Dealers is invited to
Regulation 19 of Notification No. FEMA.19/2000-RB, dated May 3, 2000 and
subsequent AP (DIR Series) Circulars No. 32, dated April 28, 2001, No. 16,
dated December 15, 2001 and No. 68, dated January 13, 2003 in terms of which, a
resident individual who is an employee or director of an Indian office or
branch of a foreign company in which the foreign holding is not less than 51%
is permitted to acquire foreign securities under ESOP Scheme, without any
monetary limit, provided the shares under ESOP are offered at a concessional
price.
2. As a measure of further
liberalisation, it has now been decided to dispense with the condition that the
shares should be offered at a concessional price. It has also been decided to
permit sale of the shares so acquired, without obtaining prior permission of
the Reserve Bank, provided the proceeds thereof are repatriated to India.
Authorised Dealers may accordingly allow remittances
for acquisition of shares under ESOP Schemes as per the terms of the offer.
3. Necessary amendments to
the Foreign Exchange Management (Transfer or issue of any foreign security)
Regulations, 2000 are being issued separately.
4. Authorised Dealers may
bring the contents of this Circular to the notice of their constituents
concerned.
5. The directions contained
in this circular have been issued under sections 10(4) and 11(1) of the Foreign
Exchange Management Act, 1999 (42 of 1999).