Overseas Investment by Mutual Funds - Liberalisation - ஆர்பிஐ - Reserve Bank of India
Overseas Investment by Mutual Funds - Liberalisation
RBI/2007-08/149 September 26, 2007 To, All Category - I Authorised Dealer Banks Madam / Sir, Overseas Investment by Mutual Funds - Liberalisation Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to Regulation 6C and Regulation 26 of Notification No.FEMA120/RB-2004 dated July 7,2004, [Foreign Exchange Management (Transfer or Issue of Any Foreign Security)Regulations, 2004] as amended from time to time (the Notification) and A. P. (DIR Series) Circular No. 97 dated April 29, 2003, A. P. (DIR Series) Circular No. 3 dated July 26, 2006, A. P. (DIR Series) Circular No. 11 dated November 16, 2006, A. P. (DIR Series) Circular No. 53 dated May 8, 2007 and A. P. (DIR Series ) Circular No 72 dated June 8, 2007. 2. The provisions for overseas investments by Mutual Funds registered with Securities and Exchange Board of India (SEBI) have been further liberalized, with immediate effect, as under : a) Enhancement of the Aggregate Ceiling The aggregate ceiling for overseas investment by Mutual Funds, registered with SEBI, has been enhanced from USD 4 billion to USD 5 billion with immediate effect. The existing facility to allow a limited number of qualified Indian Mutual Funds to invest cumulatively up to USD 1 billion in overseas Exchange Traded Funds, as may be permitted by the SEBI, shall continue. b) Further Avenues for Overseas Investment Mutual Funds, registered with SEBI are presently permitted to invest in ADRs / GDRs of Indian and foreign companies, rated debt instruments not below investment grade by accredited/registered credit rating agencies, in the equity of overseas companies listed on a recognized stock exchange overseas, in overseas mutual funds that make nominal investments (say to the extent of 10 per cent of net asset value) in unlisted overseas securities, and overseas exchange traded funds that invest in securities. In order to enable the Mutual Funds to tap a larger investible stock overseas, it has been decided to allow Mutual Funds also to invest in additional instruments, subject to the guidelines issued by SEBI. Accordingly, the Mutual Funds registered with SEBI, are permitted to invest in : 5. AD Category - I banks may bring the contents of this circular to the notice of their constituents and customers concerned. 6. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, Salim Gangadharan |