Monitoring of Foreign Investment limits in Listed Indian Companies
SEBI vide its Circular No. IMD/FPIC/CIR/P/2018/61 April 05, 2018 provides the architecture of the System for Monitoring Foreign Investment Limits in listed Indian companies. It also provides a method for disinvestment in the event of Breach of Limits.
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FEMA
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RBI
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Prescribes various Foreign Investment Limits in Listed Indian Companies. These include the aggregate FPI limit, the aggregate NRI limit and the sectoral cap.
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The RBI Master Direction (FED Master Direction No. 11/2017-18) dated January 04, 2018 provides a compilation of the instructions issued on Foreign Investment in India and its related aspects under FEMA.
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SEBI
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Depositories & Stock Exchanges
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In order to facilitate the listed Indian companies to ensure compliance with the various foreign investment limits, SEBI in consultation with RBI has decided to put in place a new system for monitoring the foreign investment limits.
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The depositories (NSDL and CDSL) shall put in place the necessary infrastructure and IT systems for operationalizing the monitoring mechanism.
The Stock Exchanges (BSE, NSE and MSEI) shall also put in place the necessary infrastructure and IT systems for disseminating information on the available investment headroom in respect of listed Indian companies.
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Depositories – NSDL & CDSL
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Timeline
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SEBI issue directions to depositories that they shall issue the necessary circulars and guidelines for collecting data on foreign investment from listed companies. The system for collecting this data from the companies shall go live on the date of the issuance of this circular. The companies shall provide the necessary data to the depositories latest by April 30, 2018.
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The new system for monitoring foreign investment limits in listed Indian companies shall be made operational on May 01, 2018. The existing mechanism for monitoring the foreign investment limits shall be done away with once the new system is operationalized.
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