TaxTMI 
TaxTMI 
TaxTMI 
DEPOSITORY RECEIPTS SCHEME, 2014
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....nt, whether listed on an international exchange or not, issued by a foreign depository in a permissible jurisdiction on the back of permissible securities issued or transferred to that foreign depository and deposited with a domestic custodian and includes 'global depository receipt' as defined in Section 2(44) of the Companies Act, 2013; (b) 'domestic custodian' means a custodian of securities, an Indian depository, a depository participant, or a bank and having permission from SEBI to provide services as custodian under this Scheme; (c) 'foreign depository' means a person which: i. is not prohibited from acquiring permissible securities; ii. is regulated in a permissible jurisdiction; and iii. has legal cap....
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....urities and Exchange Board of India. (k) 'unsponsored depository receipts' mean depository receipts issued without specific approval of the issuer of the underlying permissible securities. 2. Words and expressions used and not defined in this Scheme but defined in the Securities Contracts (Regulation) Act, 1956 or the Securities and Exchange Board of India Act, 1992 or the Depositories Act, 1996 or the Companies Act, 2013 or the Reserve Bank of India Act, 1934 or the Foreign Exchange Management Act, 1999 or Prevention of Money Laundering Act, 2002 and rules and regulations made thereunder shall have the meanings respectively assigned to them, as the case may be, in those Acts. 3. Eligibility 1. The following persons are eligible....
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....rmissible securities already held by persons resident outside India, shall not exceed the limit on foreign holding of such permissible securities under the Foreign Exchange Management Act, 1999. Explanation: For example, foreign investment in a company is ordinarily permissible up to x%. However, it can be increased up to y% with the approval of the company in the general body meeting. If no such approval has been granted, the permissible securities on which depository receipts may be issued, whether sponsored or unsponsored, cannot exceed x%. 2. The depository receipts may be converted to underlying permissible securities and vice versa, subject to the limit in sub-paragraph 1. 6. Pricing The permissible securities shall not be issued ....
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....ompany underlying depository receipts shall not be included in the total shareholding and in the public shareholding for the purpose of computing the public shareholding of the company. 4. A holder of depository receipts issued on the back of equity shares of a company shall have the same obligations as if it is the holder of the underlying equity shares if it has the right to issue voting instruction. 8. Obligations 1. The domestic custodian shall: (a)ensure that the relevant provisions of the Scheme related to the issue and cancellation of depository receipts is complied with; (b)maintain records in respect of, and report to, Indian depositories all transactions in the nature of issue and cancellation of depository receipts for the p....
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....y receipts shall not require any approval from any government agency if the issuance is in accordance with the Scheme. Explanation: If the issue of permissible securities underlying the depository receipts does not require approval under the Foreign Exchange Management Act, 1999, no approval will be required for issue of such depository receipts. 10. Market Abuse 1. It is clarified that any use, intended or otherwise, of depository receipts or market of depository receipts in a manner, which has potential to cause or has caused abuse of the securities market in India, is market abuse and shall be dealt with accordingly. 2. For the purpose of this paragraph, 'market abuse' means any activity prohibited under Chapter VA of the Sec....