By way of background, the regulatory authorities in India had notified certain amendments and undertaken steps to permit direct overseas listing of Indian entities on ‘International Exchanges’ – which have been notified by the Government of India. The ‘International Exchanges’ are the permitted stock exchanges wherein overseas listing of eligible Indian companies is permitted. Currently, only two exchanges namely, India International Exchange and NSE International Exchange in GIFT International Financial Services Centre (GIFT IFSC) have been notified by the Government of India, in this regard.
The Ministry of Finance had also made certain amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 as well as notified the ‘Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme’ at the time.
Now, in furtherance of the above, the Reserve Bank of India (RBI) has now notified certain procedural amendments to the foreign exchange regulations in relation to purchase of shares of Indian companies on notified international exchanges:
- Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) (Amendment) Regulations, 2024 (Payment Regulations Amendment) amending the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 (Payment Regulations). By way of the Payment Regulations Amendment, a new schedule has been inserted in the Payment Regulations to provide for the mode of payment and remittance of sale proceeds in respect of purchase or subscription of equity shares of companies incorporated in India on International Exchanges Scheme.
- Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) (Amendment) Regulations, 2024 (FCA Amendment) amending the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015. Pursuant to FCA Amendment, it has been provided that, subject to compliance with the conditions in regard to raising of External Commercial Borrowings or raising of resources through American Depository Receipts or Global Depository Receipts or through direct listing of equity shares of companies incorporated in India on International Exchanges, the funds so raised may, pending their utilisation or repatriation to India, be held in foreign currency accounts with a bank outside India.
For more details, kindly refer to these amendments notified by the RBI, available by clicking on these links – link (Payment Regulations Amendment) and link (FCA Amendment).
Authors & Contributors
Partner(s):
Senior Associate(s):
Keshav Pareek
Associate(s):
Ishaan Gupta