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Date:
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28-04-2008
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Notification No:
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RBI A P D (Series)Circular No 41/2008
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Issuing Authority:
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RBI
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Type:
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A.P.D.(Series) Circulars
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File No:
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RBI/2007-08/303
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Subject:
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Foreign investment in Commodity Exchanges - Amendment to the Foreign Direct Investment Scheme
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RBI/2007-08/303
A.P. (DIR Series) Circular No.41
April 28, 2008
To,
All Category – I Authorised Dealer Banks
Madam / Sir,
Foreign investment in Commodity Exchanges
- Amendment to the Foreign Direct Investment Scheme
Attention of Authorised Dealer Category - I (AD Category - I) banks is invited to Schedule I to Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, notified vide FEMA Notification No.20/2000-RB dated May 3, 2000, as amended from time to time.
- It has been decided in consultation with Government of India to allow foreign investment in Commodity Exchanges subject to the following conditions :
- There would be a composite ceiling of 49% Foreign Investment, with a FDI limit of 26% and an FII limit of 23%.
- FDI will be allowed with specific approval of the Government.
- The FII purchases in equity of Commodity Exchanges will be restricted only to the secondary markets.
- Foreign Investment in Commodity Exchanges would also be subject to compliance with the regulations issued, in this regard, by the Forward Market Commission.
A copy of Press Note 2 (2008 series) dated March 12, 2008 issued in this regard is enclosed.
- AD Category – I banks may bring the contents of this circular to the notice of their constituents and customers concerned.
- Necessary amendments to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 are being issued separately.
- The directions in this circular have been issued under Sections 10(4) and 11(1) of Foreign Exchange Management Act, 1999 (42 of 1999) and is without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Salim Gangadharan)
Chief General Manager-in-Charge
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