The Reserve Bank of India (RBI), vide Notification No. FEMA 20(R)/ 2017-RB, dated 7 November 2017 issued the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 replacing the Foreign Exchange Management (Transfer or Issue of Security by a person resident outside India) Regulations 2000 (Erstwhile Regulation). This shall come into force effectively from 8 November 2017.
The key changes under this regulation are as below:
- Erstwhile Regulation restricts only Indian entity to issue any securitywhereasRegulations, 2017 wider its scope by restricting not only Indian entity but also an investment vehicle, or a venture capital fund or a Firm or an Association of Persons or a proprietary concern.
- Time-limit for allotment of shares has been restricted to 60 days from the date of receipt of money to make it inline with the Companies Act 2013.
- The Erstwhile regulation required compounding in the case of filing respective forms beyond the timeline prescribed thereunder. However, the new regulations allow delayed reporting subject to payment of late submission fees.
The complete notified regulation is available in below link: