1.
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Transfer
of shares between resident and non-resident and vice versa, where pricing
guidelines are not met, will not require the approval of RBI on compliance of
following conditions: |
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i. |
The original and
resultant investment are in line with the extant FDI policy and FEMA
regulations in terms of sectoral caps, conditionality’s (such as minimum
capitalization, etc.), reporting requirements, documentation, etc.; |
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ii. |
The pricing for the transaction is
compliant with the specific/explicit, extant and relevant SEBI regulations /
guidelines (such as IPO, Book building, block deals, delisting, exit, open
offer/ substantial acquisition / SEBI SAST, buy back); and |
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iii. |
Chartered Accountants Certificate to
the effect that compliance with the relevant SEBI regulations / guidelines as
indicated above is attached to the form FC-TRS to be filed with the AD bank.
Imp: Before the liberalization of
the aforesaid procedure, in case of transfer of shares from resident to
non-resident of a listed company, the pricing of shares is to be done in
accordance with the SEBI guidelines for preferential allotment. But in case of
transfer of shares under Open offer/ Delisting/IPO etc, the valuation of shares
is to be done in accordance with the relevant SEBI guidelines, which
necessitates taking of approval of RBI every time , thereby causing undue
hardship. In order to avoid the said hassle, RBI has taken the aforesaid step.
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| 2. |
Transfer
of shares between resident and non-resident, under the following conditions,
approval of RBI is not required: |
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i. |
where the transfer of shares requires the prior approval of
the FIPBas per
the extant FDI policy provided that : |
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a. |
The requisite
approval of the FIPB has been obtained; and |
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b. |
The transfer of share adheres with the pricing
guidelines and documentation requirements as specified by the Reserve Bank of
India from time to time. |
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ii. |
Where SEBI (SAST) guidelines are
attracted subject to the adherence with the pricing guidelines and
documentation requirements as specified by Reserve Bank of India from time to
time. |
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iii. |
Where the investee company is in the financial sector provided that: |
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a. |
NOCs
are obtained from the respective financial sector regulators/ regulators of the
investee company as well as transferor and transferee entities and such NOCs
are filed along with the form FC-TRS with the AD bank; and |
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b. |
The FDI policy and FEMA regulations in terms of sectoral caps, conditionalities (such as minimum capitalization, etc.), reporting requirements, documentation etc., are complied with
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