Carry forward of unspent administrative expenses permitted, with reporting in Form FC 4 and chartered accountant certification required.
Associations may carry forward the unspent part of allowable administrative expenses to the immediately succeeding financial year with reasons recorded in Form FC-4. Form FC-4 is amended to add a receipt item for transfer of the foreign contribution part of income tax refunds from non FCRA accounts, a detailed schedule for carry forward calculations and reasons, and expanded chartered accountant particulars and certification language requiring examination of FC 4 entries and disclosure of any violations.

Startup definition revised under FEMA regulations; aligns startup recognition to DPIIT notification, affecting foreign currency account provisions.
Amendment revises the regulatory meaning of startup for foreign currency account purposes by substituting explanations in Regulation 5 (sub reg E) and the explanatory note to paragraph 1(vii) of Schedule I of the EEFC Account Scheme to cross refer to government recognition under the 2019 notification as amended; the Regulations are titled as the Fourth Amendment Regulations, 2024, and commence upon publication in the Official Gazette.

Compounding framework under FEMA enables administrative settlement of foreign exchange contraventions with prescribed authorities and procedures.
The rules create a compounding mechanism under the Act allowing specified compounding authorities-Director of Enforcement, authorised officers, and graded Reserve Bank and Directorate officers under supervisory control-to accept applications in the prescribed Form with fee and documents, call for further information, afford a hearing and issue dated signed compounding orders within a statutory timeframe; they also prescribe exclusions to compounding, payment methods and timelines for the compounded sum, and consequences of non payment, while ensuring copies of orders are provided to the applicant and Adjudicating Authority.

Swap of equity instruments permitted between residents and non-residents subject to government rules, RBI regulations and required approvals.
The rules align the definition of control with the Companies Act and LLPs, define startup company by DPIIT identification, mandate prior Government approval wherever applicable for transfers, and allow swaps of equity instruments and equity capital between residents and non-residents subject to Central Government rules, RBI regulations and prior Government approval. The amendments exclude certain NRI/OCI owned Indian-entity investments on a non-repatriation basis from indirect foreign investment calculations, add White Label ATM Operations under automatic entry with conditions, clarify FPI investor group treatment, and permit startup equity issuances subject to sectoral caps and conditions.

Permission for non residents to buy Sovereign Green Bonds in IFSCs with prescribed payment and repatriation rules.
Non resident persons maintaining securities accounts in an IFSC may purchase and sell Sovereign Green Bonds issued by the Government of India under terms specified by the Reserve Bank. Consideration must be paid by inward remittance through banking channels or from funds in an authorized foreign currency account, and sale or maturity proceeds, net of taxes, may be remitted outside India.

Interest-bearing accounts for margin posting allowed for non-residents in local or foreign currency for permitted derivative contracts.
An authorised dealer in India may allow a person resident outside India to open, hold and maintain an interest-bearing account in Indian rupees and/or foreign currency for the purpose of posting and collecting margin in India for a permitted derivative contract entered into by such person under the Margin for Derivative Contracts Regulations, 2020, subject to directions issued by the Reserve Bank.

Cross-border margining: authorised dealers may post and collect derivatives margin internationally under Reserve Bank directions, including for branches.
The amendment recognises credit derivative contracts under the Master Direction on Credit Derivatives and substitutes Regulation 4 to permit authorised dealers to post and collect margin and receive/pay interest in India and abroad for permitted derivative contracts with non-residents, between authorised dealers (where one is a foreign bank branch), and for overseas branches and IFSC Banking Units, subject to terms, conditions and directions issued by the Reserve Bank.

Mode of Payment for international listings clarifies permitted banking channels and reporting for purchases, subscriptions and sale proceeds.
Schedule XI prescribes that consideration for purchase/subscription of equity shares of Indian companies listed on international exchanges must be paid through banking channels to the company's foreign currency account or as inward remittance, with proceeds remitted to India or deposited in the compliant foreign currency account; sale proceeds (net of taxes) may be remitted abroad or credited to the permissible holder's account. Reporting obligations require Authorised Dealer Category I banks to submit Form LEC(FII) for FPI purchases/transfers on Indian exchanges and for purchases/subscriptions on international exchanges classified as FPI, reported by the investee company via the bank.

Foreign currency accounts: funds raised through ECB ADRs GDRs or international listings may be held abroad pending repatriation.
Funds procured through External Commercial Borrowings, American Depository Receipts, Global Depository Receipts or by direct international listing of equity of Indian companies may, pending their utilisation in accordance with applicable rules or repatriation to India, be held in foreign currency accounts with a bank outside India, subject to compliance with the conditions governing the raising of such funds.

Foreign investment in space sector: automatic up to defined thresholds, government approval beyond those thresholds; manufacturing allowed automatic.
Substitutes Schedule I entry for the space sector to classify space activities-satellite manufacturing and operation, satellite data products, ground and user segments, launch vehicles and spaceports, and component manufacturing-and prescribes which investments are on the automatic route and which require government approval beyond specified thresholds; manufacturing of components is on the automatic route. Investee entities must follow sectoral guidelines issued by the space authority. Detailed definitions of the covered activities are provided.

Partly paid-up units inclusion expands 'unit' definition under non-debt instrument rules, subject to SEBI regulations.
An Explanation is inserted into clause (aq) of rule 2 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 clarifying that unit includes partly paid up units permitted under regulations framed by the Securities and Exchange Board of India in consultation with the Government of India.

Direct listing on international exchanges enables Indian public companies to issue equity abroad subject to compliance and foreign holding limits.
The amendment permits Indian public companies to issue or existing shareholders to offer equity shares on specified International Exchanges under a Direct Listing Scheme, establishes "permissible holder" rules (excluding residents and requiring government approval where holders have connections to bordering countries), prescribes eligibility exclusions (debarred persons, wilful defaulters, entities under investigation, fugitive economic offenders), mandates compliance with Indian securities, depository, foreign exchange and AML laws, limits aggregate foreign holdings to Schedule I caps, requires voting by permissible holders or via custodians with instructions, and sets pricing norms aligned with domestic issuance or fair market value.