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TMI BlogForeign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise, - a) 'Act' means the Foreign Exchange Management Act, 1999 (42 of 1999); b) 'Rules' means Foreign Exchange Management (Non-Debt Instrument) Rules, 2019; c) The words and expressions used but not defined in these regulations shall have the same meanings respectively assigned to them in the Act or the Rules. 3. Mode of Payment and Remittance of sale proceeds: 3.1 Schedule of the Rules Instructions on Mode of payment and Remittance of sale proceeds I. Schedule I (Purchase or sale of equity instruments of an Indian company by a person resident outside India) A. Mode of payment (1) The amount of consideration shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B)/Escrow account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. Explanation : The amount of consideration shall include: (i) Issue of equity shares by an Indian company against any funds payable by it to the investor (ii) Swap of equity instruments. (2) Equity instruments shall be issued to the person resident outside India making such investment within sixty days from the date of receipt of the consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (PIS) Account and the designated account shall be used exclusively for putting through transactions permitted under this Schedule. (3) Investment in units of domestic mutual fund shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B) account. (4) Subscription to National Pension System shall be paid as inward remittance from abroad through banking channels or out of funds held in NRE/FCNR(B)/NRO account. B. Remittance of sale proceeds The sale proceeds (net of taxes) of equity instruments may be remitted outside India or may be credited to NRE (PIS) account of the person concerned. The sale proceeds (net of taxes) of units of mutual funds and subscription to National Pension System may be remitted outside India or may be credited to NRE (PIS)/FCNR(B)/NRO account of the person concerned at the option of the NRI/OCI investor. IV. Schedule IV (Investment by NRI or OCI on non-repatriation basis) 1. Purchase or sale of equity instruments of an Indian company or units or contribution to the capital of a LLP by Non-Resident Indian (NRI) or Overseas Citizen of India (OCI) on Non-repatriation basis. A. Mode of Payment The amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance from abroad through banking channels or out of funds held in a foreign currency account and/or a Special Non-Resident Rupee (SNRR) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. (2) The foreign currency account and SNRR account shall be used only and exclusively for transactions under this Schedule. B. Remittance of sale/maturity proceeds The sale/maturity proceeds (net of taxes) of the securities may be remitted outside India or may be credited to the foreign currency account or a Special Non-resident Rupee Account of the FVCI. VIII. Schedule VIII (Investment by a person resident outside India in an Investment Vehicle) A. Mode of payment The amount of consideration shall be paid as inward remittance from abroad through banking channels or by way of swap of shares of a Special Purpose Vehicle or out of funds held in NRE or FCNR(B) account maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. B. Remittance of sale/maturity proceeds The sale/maturity proceeds (net of taxes) of the units may be remitted outside India or may be credited to the NRE or FCNR(B) account of the person con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-repatriable basis; and ii. a person resident outside India holding equity instruments in an Indian company on a repatriable basis and a person resident in India, The onus of reporting shall be on the resident transferor/transferee or the person resident outside India holding equity instruments on a non-repatriable basis, as the case may be. Note: Transfer of equity instruments in accordance with the rules by way of sale between a person resident outside India holding equity instruments on a non-repatriable basis and person resident in India is not required to be reported in Form FC-TRS. (b) Transfer of equity instruments on a recognised stock exchange by a person resident outside India shall be reported by such person in Form FC-TRS. (c) Transfer of equity instruments prescribed in Rule 9(6) of the Rules, shall be reported in Form FC-TRS on receipt of every tranche of payment. The onus of reporting shall be on the resident transferor/transferee. (d) Transfer of 'participating interest/rights' in oil fields shall be reported Form FC-TRS. The form FCTRS shall be filed within sixty days of transfer of equity instruments or receipt/remittance of funds whicheve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estee Indian entity in terms of Rule 22 of the Rules shall file Form DI with the Reserve Bank within 30 days from the date of allotment of equity instruments. (12) Form Convertible Notes (CN): a. The Indian start-up company issuing Convertible Notes to a person resident outside India shall file Form CN within 30 days of such issue. b. A person resident in India, who may be a transferor or transferee of Convertible Notes issued by an Indian start-up company shall report such transfers to or from a person resident outside India, as the case may be, in Form CN within 30 days of such transfer. Provided, the format, periodicity and manner of submission of such reporting shall be as prescribed by Reserve Bank in this regard. Provided further that unless otherwise specifically stated in these regulations all reporting shall be made through or by an Authorised Dealer bank, as the case may be. 5. Delays in reporting The person/entity responsible for filing the reports provided in Regulation 4 above shall be liable for payment of late submission fee, as may be decided by the Reserve Bank, in consultation with the Central Government, for any delays in reporting. [F. No. 1/14/EM/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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