Reserve
Bank of India
Foreign Exchange Department
Central Office
Mumbai-400 001 Notification
No.FEMA. 162 /2007- RB Dated
September 18, 2007 Foreign Exchange Management (Deposit)
(Third Amendment) Regulations, 2007 In exercise
of the powers conferred by clause (f) of Sub-section (3) of Section 6, Sub-Section
(2) of Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999) the
Reserve Bank of India makes the following amendments in the Foreign Exchange Management
(Deposit) Regulations, 2000 (Notification
No. FEMA.5/2000-RB dated May 3, 2000) namely:- 1.
Short Title & Commencement:- (i) These Regulations
may be called the Foreign Exchange Management (Deposit) (Third Amendment) Regulations,
2007.
(ii) They shall be deemed to have come into force from May 24, 2007.
@ 2. Amendment of the Regulations:- In
the Foreign Exchange Management (Deposit) Regulations, 2000 (Notification No.
FEMA.5/2000-RB dated May 3, 2000), (i) in regulation 5,
after sub-regulation (2), the following new sub-regulation shall be inserted,
namely :- "2A Non-resident acquirers may, subject
to the terms and conditions specified in Schedule 8, open, hold and maintain Escrow
Account and Special Account with Authorised Dealers in India without prior approval
of the Reserve Bank, for acquisition / transfer of shares / convertible debentures
through open offers / delisting / exit offers, subject to the relevant Security
Exchange Board of India (SAST) Regulations or any other applicable Security Exchange
Board of India Regulations / provisions of the Companies Act, 1956.' (ii)
after Schedule 7, a new Schedule as in Annex to these regulations shall be inserted.
(Salim Gangadharan)
Chief General Manager Foot
Note: (i)
@ It is clarified that no person will be adversely affected as a result of retrospective
effect being given to such regulations. (ii) The Principal
Regulations were published in the Official Gazette vide G.S.R.No.388 (E) dated
May 5, 2000 in Part II, Section 3, Sub-section (i) and subsequently amended as
under: (a) G.S.R. No. 262(E) dated April 9, 2002;
(b)
G.S.R. No. 577(E) dated August 19, 2002;
(c) G.S.R. No. 855(E) dated December
31, 2002;
(d) G.S.R. No. 494(E) dated August 4, 2004;
(e) G.S.R. No. 221(E)
dated April 7, 2005;
(f) G.S.R. No. 663(E) dated November 14, 2005;
(g)
G.S.R. No. 28 (E) dated January 19, 2006; and
(h) G.S. R. No.495(E) dated July
23, 2007.
(j) G.S. R. No.664(E) dated October 16, 2007.
| Published
in the Official Gazette of Government
of India – Extraordinary – Part-II, Section
3,
Sub-Section (i) dated 15.2.2008 - G.S.R.No. 91 (E) |
Annex Schedule
8 (See Sub Regulation 2A of Regulation 5) Terms
and conditions for opening of Escrow Account and Special Account by non-resident
corporates for open offers / delisting / exit offers
1. Acquisition / Transfer
of shares shall be strictly in accordance with the provisions of Notification
No. FEMA 20/2000-RB dated 3rd May, 2000 as amended from time to time and Security
Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations,
1997 [SEBI (SAST) Regulations] or any other SEBI Regulations [SEBI Regulations]
as applicable. 2. The accounts shall be non-interest bearing. 3.
Escrow Account may be opened in Indian Rupees, jointly and severally for the purpose,
with the following permitted credits and debits: Permitted
credits : Foreign Inward Remittance through normal banking channels.
Permitted
debits : as per SEBI (SAST) Regulations or any other SEBI Regulations, as applicable. 4.
Special Account may be opened in Rupees, jointly and severally for the purpose,
with the credit and debits as per SEBI (SAST) Regulations or any other SEBI Regulations,
as applicable. 5. The resident mandatee empowered by the
overseas acquirer for this purpose, may operate the Escrow Account in accordance
with SEBI (SAST) Regulations or any other SEBI Regulations, as applicable and
with the specific approval of the Authorised Dealer with whom the account is opened. 6.
No fund based / non-fund based facilities shall be permitted against the balance
in the accounts. 7. Requirement of compliance with KYC guidelines
issued by the Reserve Bank shall rest with the Authorised Dealer. 8.
Balance in the Escrow Account, if any, may be repatriated at the then prevailing
exchange rate (i.e. the exchange rate risk will be borne by the overseas company
acquiring the shares), after all the formalities in respect of the said acquisition
are completed . 9. In the event, the proposal under the
said acquisition/transfer does not materialize, the Authorised Dealer may allow
repatriation of the entire amount lying to the credit of the Escrow Account on
being satisfied with the bonafides of such remittances. 10.
The accounts shall be closed immediately after completing the requirements as
outlined above. |
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