TaxTMI 
TaxTMI 
Prior Permission of Reserve Bank in Certain Cases for Transfer of Security
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....heme. (c) The applicable sectoral cap/ foreign direct investment limit in the Indian company is not breached. (d) The donor and the donee are relatives as defined in section 6 of the Companies Act, 1956. ^7[e) The value of security to be transferred by the donor together with any security transferred to any person residing outside India as gift during the financial year does not exceed the rupee equivalent of US $ 50,000.] (f) Such other conditions as considered necessary in public, interest by the Reserve Bank. (iii) The application for approval referred to in sub clause (i) shall contain the following information/ documents: (a) Name and address of the donor and the donee. (b) Relationship between the donor and the donee. (c) Reasons for making the gift. (d) In case of Government dated securities and treasury bills and bonds, a certificate issued by a Chartered Accountant on the market value of such securities. (e) In case of units of domestic mutual funds and units of Money Market Mutual Funds, a certificate from the issuer on the Net Asset Value of such security. ^16[(f) In case o....
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....s aforesaid are not complied with, for the purposes of this Regulation, compliance with pricing guidelines, reporting and documentation requirements as stipulated by RBI shall be sufficient. (iv) where the pricing guidelines under the Foreign Exchange Management Act, (FEMA) 1999 are not complied with - (a) The resultant FDI is in compliance with the requirements of Schedule 1, other than pricing guidelines; and (b) The pricing for the transaction is compliant with the applicable SEBI Regulations/guidelines; and (c) Chartered Accountants Certificate to the effect that compliance with the applicable SEBI regulations/ guidelines as indicated above is attached to the form FC-TRS to be filed with the AD bank. (v) where the investee company is in the financial services sector (a) ^15[***] (b) The requirements of Schedule 1 are complied with. Explanation : For the purpose of this Regulation, "financial services", shall mean service rendered by banking and non-banking companies regulated by the Reserve Bank, insurance companies regulated by Insurance Regulatory and Development Authori....
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....ed from time to time for acquisition of ^27[shares or convertible debentures or warrants] through open offers/delisting/exit offers, subject to compliance with the relevant SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended from time to time. Such Escrow account may be funded by way of inward remittance through normal banking channel and/or by way of guarantee issued by an authorized dealer bank, subject to terms and conditions as specified in the Foreign Exchange Management (Guarantees) Regulations, as amended from time to time.] ^14[D. A non-resident including Non Resident Indian may acquire shares of a listed Indian company on the recognised stock exchange through a registered broker under FDI Scheme provided that; a. The non-resident investor has already acquired the control in accordance with SEBI (Substantial Acquisition of Shares and Takeover) Regulations and continues to hold such control; b. The amount of consideration for purchase of shares on the recognised stock exchange for transfer to non-residents may be paid as specified in para 8 of Schedule 1 to Notification No. FEMA.20/2000-RB dated 3^rd May, 2000 or out of t....
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....ivalent of USD 25,000." 8. Inserted vide Notification No. 265/2013-RB 05-03-2013, w.e.f. 05-03-2013. 9. Substituted vide Notification No. FEMA. 242/2012-RB Dated 19-10-2012 w.e.f. 04-11-2011, before it was read as, "Prior permission" 10. Substituted vide Notification No. FEMA. 242/2012-RB Dated 19-10-2012 w.e.f. 04-11-2011, before it was read as, "^2[(b) any share/convertible debenture of an Indian Company whose activities fall under Annexure B to Schedule 1, other than items nos. 1, 2, and 3 and subject to the Sectoral Limits specified therein, shall transfer such shares/debentures without prior approval of Government and RBI if the same is by way of sale subject to the following: (i) that the Indian Company whose shares or convertible debentures are proposed to be transferred is not engaged in rendering any financial service; (ii) that the transfer does not fall within the purview of the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997; and (iii) that the concerned parties adhere to pricing guidelines, documentation and reporting requirements for such transfers as m....