purchase/sale of
shares by overseas corporate
bodies (ocbs)
on a stock exchange in india
A.P. (DIR Series) (2001-2002) Circular No. 13, dated 29-11-2001
Purchase/sale of shares and/or convertible debentures by Overseas Corporate Bodies OCBs) on a Stock Exchange in India under the Portfolio Investment Scheme (PIS)
1. Authorised
Dealers are aware that in terms of Schedule 3 to Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident outside India) Regulations,
2000, NRIs and OCBs are eligible to purchase/sell, through a designated branch
of an Authorised Dealer, shares and convertible debentures of Indian Companies
on a stock exchange in India, under the PIS.
2. It has
been decided that henceforth OCBs shall not be permitted to invest under the
PIS in India. Further, the OCBs that have already made investments under the
Portfolio Investment Scheme, may continue to hold such shares/convertible
debentures till such time these are sold on the stock exchange.
3. The link
offices of the ADs will continue to report the sale transactions undertaken by
the OCBs on daily basis as hitherto.
4. Accordingly,
Notification No. FEMA 46/2001-RB dated November 29, 2001 has been issued
amending the Foreign Exchange Management (Transfer or Issue of Security by a
Person Resident outside India) Regulations, 2000.
5. It is,
however, clarified that OCBs will continue to enjoy the facilities of opening
and maintaining non-resident accounts as hitherto. OCBs would also continue to
be eligible for making direct investment (FDI), under Foreign Exchange
Management (Transfer or Issue of Security by a Person Resident outside India)
Regulations, 2000 issued vide Reserve Bank Notification No. FEMA
20/2000-RB dated May 3, 2000, as amended from time to time.
6. Authorised
Dealers may bring the contents of the circular to the notice of their
constituents concerned.
7. The
directions contained in this circular have been issued under section 10(4) and
section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999).