Para NO.3.3.2.1 of the consolidated FDI guidelines issued recently has been deleted
The Paragraph which went as follows was under debate as it was putting a question mark on certain instument keeping them out of FDI . Now it stands deleted
“ 3.3.2.1: Only equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares, with no in-built options of any type, would qualify as eligible instruments for FDI. Equity instruments issued/transferred to non-residents having in-built options or supported by options sold by third parties would lose their equity character and such instruments would have to comply with the extant ECB guidelines.”
This paragraph now stands deleted from ‘Circular 2 of 2011’.
The Paragraph which went as follows was under debate as it was putting a question mark on certain instument keeping them out of FDI . Now it stands deleted
“ 3.3.2.1: Only equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares, with no in-built options of any type, would qualify as eligible instruments for FDI. Equity instruments issued/transferred to non-residents having in-built options or supported by options sold by third parties would lose their equity character and such instruments would have to comply with the extant ECB guidelines.”
This paragraph now stands deleted from ‘Circular 2 of 2011’.
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