Attention of Authorized Dealers (ADs) is invited to Para 16, Chapter 14 and Paras 7(v), 7(vi) & 7(vii) of Chapter 20 of the Foreign Exchange Manual (FEM) wherein the process of designation and registration of shares/units have been specified.
2. In order to promote ease of doing business and facilitate foreign investors, it has been decided to delegate the functions of registration of shares/units on repatriable basis issued/transferred by local companies/funds to the non-residents and designation of ADs for the purpose of remittance of dividend and disinvestment proceeds to non-resident shareholders/unitholders to ADs. Furthermore, the documentary requirements for registration of shares/units on repatriable basis have been simplified.
3. Accordingly, Para 16, Chapter 14 and Paras 7(v), 7(vi) & 7(vii), Chapter 20 of FEM have been suitably amended. Further, in order to provide guidance to ADs regarding the above-mentioned delegated functions and ensure consistency across the industry, Standard Operating Procedures (SOPs) have been developed and made part of the revised instructions. The amended Paras and SOPs are attached as Annexure-A and Annexure-B, respectively.
4. In order to allow ADs adequate time to put in place the required institutional arrangements, these instructions shall be effective one month after issuance of this F.E. Circular.
5. The ADs are advised to bring the above amendments to the notice of all their constituents for meticulous compliance.
Enclosed:
- Annexure-A: Revised paras of FEM
- Annexure-B: Standard Operating Procedures