Notification No.FEMA.132/2005-RB dated
March 31, 2005
Foreign Exchange Management (Transfer or
Issue of any Foreign Security) (Amendment) Regulations, 2005
In exercise of the powers conferred by clause
(a) of sub-section (3) of Section 6, and sub-section (2) of Section 47 of the
Foreign Exchange Management Act, 1999 (42 of 1999), and in partial modification
of its Notification No.FEMA.120/RB-2004 dated 7th July 2004 the Reserve Bank
of India makes the following amendments in the, Foreign Exchange Management
(Transfer or Issue of Any Foreign Security) (Amendment) Regulations, 2004, namely:-
1. Short title and Commencement:-
(i) These Regulations. may be called the Foreign
Exchange Management (Transfer or Issue of Any Foreign Security)(Amendment) Regulations,
2005.
(ii) They shall come into force on the dates
specified hereunder.
2. Amendment to the Regulations:-
(i) In Regulation 22, sub regulation (2) shall
be substituted with the following which shall be deemed to have come into force
with effect from February 9, 2005
'(2) A person resident in India, being an individual,
who is an employee or a director of an Indian office or branch of a foreign
company or of a subsidiary in India of a foreign company or of an Indian company
in which the foreign equity holding, either directly or indirectly, is not less
than 51 per cent, may purchase the equity shares offered by the said foreign
company.
Explanation
For the purpose of this clause, 'indirectly'
means indirect foreign equity holding through a special purpose vehicle or a
step down subsidiary.'
(ii) In Regulation 24, sub-regulation (3),
shall be substituted with the following, which shall be deemed to have come
into force with effect from 1st October 2004.
'(3) An Indian company in the knowledge based
sector may allow its resident employees (including working directors) to purchase'
foreign securities under the ADR/GDR linked stock option schemes:
Provided that the issue of employees stock
option by a listed company shall be governed by SEBI (Employees Stock Option
and Stock Purchase Scheme) Guidelines, 1999 and the issue of employees stock
option by an unlisted company shall be governed by the guidelines issued by
the Government of India for issue of ADR/GDR linked stock options.
Provided further that the consideration for
the purchase does not exceed the ceiling as stipulated by the Reserve Bank from
time to time.
Explanation : For the purpose of this
clause 'knowledge based sector' means such sectors as have been notified by
the Government of India from time to time in terms of .its guidelines for the
issue of ADR/GDR linked Employees Stock Options by the Indian Companies dated
15th September 2000.'
( F. R.
Joseph )
Chief General Manager
1. The Principal Regulations were published in the Official Gazette vide G.S.R.No.456(E) dated May 8, 2000 in Part II, Section 3, sub-section (i) and subsequently superceded vide G.S.R.No.757(E) dated November 19, 2004.