In order to enable listed Indian companies to ensure compliance with the various foreign investment limits, Reserve Bank in consultation with SEBI, has decided to put in place a new system for monitoring foreign investment limits.
In accordance with the circular by SEBI dated April 5, 2018, all listed Indian companies are required to provide the specified information on foreign investment to the depositories before May 15, 2018. The listed companies in non-compliance with the above instructions will not be able to receive foreign investment and will be non-compliant with Foreign Exchange Management Act, 1999 (FEMA) and applicable regulations.
Upon implementation of the new monitoring system, all Authorised Dealer banks would be required to provide the details of investment made by their respective NRI clients to the depositories in the format as provided by the depositories/ SEBI. In addition, the reporting to Reserve Bank in the existing system, namely LEC (NRI) and LEC (FII), would continue.
May 5th, 2018