November 2016
Notification No. FEMA 375/2016-RB dated September 9, 2016
By Gaurang Gandhi, Chartered Accountant
Reading Time 2 mins
Foreign Exchange management (Transfer or issue of Security
by a Person Resident out- side india) (Thirteenth amendment) Regulations, 2016
This
Notification states that Schedule 1, in Annex B, Para graph F.8 Notification
No. FEMA. 20/2000-RB dated 3rd may 2000 will be substituted as under:
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F.8
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Other Financial Services
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Financial Services activities
regulated by financial sector regulators, viz., RBI, SEBI, IRDA, PFRDA, NHB
or any other financial sector regulator as may be notified by the Government
of India.
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100%
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Automatic
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F.8.1
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Other Conditions
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i. Foreign investment in ‘Other
Financial Services’ activities shall be subject to conditionalities,
including minimum capitalization norms, as specified by the concerned
Regulator/Government Agency.
ii. ‘Other Financial Services’ activities need to be
regulated by one of the Financial Sector Regulators. In all such financial
services activity which are not regulated by any Financial Sector Regulator
or where only part of the financial services activity is regulated or where
there is doubt regarding the regulatory oversight, foreign investment up to
100% will be allowed under Government approval route subject to conditions
including minimum capitalization requirement, as may be decided by the
Government.
iii. Any activity which is specifically regulated by an
Act, the foreign investment limits will be restricted to those
levels/limit that may be specified in that Act, if so mentioned.
iv. Downstream investments by any of these entities engaged in “Other
Financial Services” will be subject to the extant sectoral regulations
and provisions of Foreign Exchange Management (Transfer or Issue of
Security by a Person Resident outside India) Regulations, 2000, as amended
from time to time.”
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