permission for purchase/acquisition of foreign securities
Permission for Purchase/Acquisition of Foreign Securities - Clarification
1. Attention
of authorised dealers is invited to item (e) of paragraph 2 of the AP
(DIR Series) Circular No. 32 dated April 28, 2001. In terms of Regulations 19
of the Reserve Bank Notification No. FEMA 19/2000-RB dated May 3, 2000, as
amended from time to time, ADs have been permitted to allow remittance by a person
resident in India, being an individual, who is an employee or director, of an
office or branch in India of a foreign company or a subsidiary in India of a
foreign company or of an Indian company in which foreign equity holding is not
less than 51 per cent, provided the shares are offered at concessional price.
The eligible residents as defined in sub-paragraph (2) of the Regulation 19 are
permitted to remit USD 20,000, or its equivalent per calendar year provided the
shares are being offered on a concession.
2. It is
clarified that the concession in price of shares being offered under Employees
Stock Option Scheme (ESOP) may be borne by the foreign company issuing the
shares or by its Indian branch/office/subsidiary or the company in India in
which the foreign equity holding is not less than 51 per cent.
3. Authorised
dealers may bring the contents of this circular to the notice of their
constituents concerned.
4. 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).