The Foreign Exchange Department on 19th April, 2024 has issued the Foreign Exchange Management (Mode of Payment and Reporting of Non Debt Instruments) (Amendment) Regulations, 2024. The amendment provides that the amount of consideration for purchase / subscription of equity shares of an Indian company listed on an International Exchange shall be paid, –
- Through banking channels to a foreign currency account of the Indian company held in accordance with the Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2015, as amended from time to time; or
- As inward remittance from abroad through banking channels.
The Authorised Dealer Category I banks shall report to the Reserve Bank in Form LEC (FII) the purchase / transfer of equity instruments by FPIs on the stock exchanges in India.
The Investee Indian company through an Authorised Dealer Category I bank shall report to the Reserve Bank in Form LEC (FII) the purchase/subscription of equity shares (where such purchase / subscription is classified as Foreign Portfolio Investment under the rules) by permissible holder, other than transfers between permissible holders, on an International Exchange.
