Reserve bank of India (RBI)

Amendment in Regulations:

1. Foreign Exchange Management (Permissible Capital Account Transactions) (Fourth Amendment) Regulations, 2015: Reserve Bank of India has in consultation with the Central Government issued Notification No. FEMA. 345/2015-RB, dated 16.11.2015 further amending Foreign Exchange Management (Permissible Capital Account Transactions) Regulations, 2000 by substituting the existing Explanation (i) in sub-regulation (b) of Regulation 4 as under:

   “(i) For the purpose of this regulation, “real estate business” shall not include development of townships, construction of residential /commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations 2014”

   This amendment shall come in force from 16.11.2015 i.e., date of publication in the Official Gazette vide G.S.R.No.859 (E).

2. Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) (Eleventh Amendment) Regulations, 2015: Reserve Bank of India has in consultation with the Central Government issued Notification No. FEMA. 355/2015-RB dated 16.11.2015 further amending Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 as under:
   1. Amendment to Regulation 2:
      1. After the existing sub-regulation (ii f) the following shall be added namely:

         “(ii g) ‘Investment Vehicle’ shall mean an entity registered and regulated under relevant regulations framed by SEBI or any other authority designated for the purpose and shall include Real Estate Investment Trusts (REITs) governed by the SEBI (REITs) Regulations, 2014, Infrastructure Investment Trusts (InvIts) governed by the SEBI (InvIts) Regulations, 2014 and Alternative Investment Funds (AIFs) governed by the SEBI (AIFs) Regulations, 2012.”

      2. After the existing sub-regulation (xi), the following shall be added namely:

         “(xi A) ‘Unit’ shall mean beneficial interest of an investor in the Investment Vehicle and shall include shares or partnership interests.”

   2. Amendment to Regulation 5: in Regulation 5, after the existing sub-regulation (9), the following shall be added, namely:

      “(10) A person resident outside India (other than an individual who is citizen of or any other entity which is registered / incorporated in Pakistan or Bangladesh), including an Registered Foreign Portfolio Investor (RFPI) or a non-resident Indian (NRI) may acquire, purchase, hold, sell or transfer units of an Investment Vehicle, in the manner and subject to the terms and conditions specified in Schedule 11.”

   3. Amendment to Regulation 9: in Regulation 9, for the words, “shares or convertible debentures or warrants,” and “shares or convertible debentures or warrants of an Indian company”, wherever they appear, the words, “shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle” shall be substituted.
   4. Amendment to Regulation 12: in Regulation 12, after the existing sub-regulation (v), the following shall be added, namely:

      “(vi) Any person who is a non-resident and holds units of an Investment Vehicle in accordance with these Regulations may pledge such units to secure credit facilities being extended to the non-resident investor.”

   5. Addition of a new Schedule: After the existing Schedule 10, the Schedule 11 shall be added.These amendments shall come in force from 16.11.2015 i.e., date of publication in the Official Gazette vide G.S.R.No.858 (E).

Circulars:

1. Software Export – Filing of bulk SOFTEX-further liberalization: Reserve Bank of India vide A.P. (DIR Series) Circular No.27 dated 05.11.2015:
   1. all software exporters are made eligible to declare all the off-site software exports in bulk in the form of a statement in excel format, to the competent authority for certification on monthly basis. Earlier only software exporter, whose annual turnover is at least Rs.1000 crore or who files at least 600 SOFTEX forms annually on an all India basis were eligible.
   2. The SOFTEX form is given at Annex I. Since the SOFTEX data from STPI/SEZ is being transmitted in electronic format to RBI, the exporters are required to submit the SOFTEX form in duplicate as per the revised procedure. STPI/SEZ will retain one copy and handover the duplicate copy to the exporters after due certification. (http://rbidocs.rbi.org.in/rdocs/content/docs/AIRNT0515_I.xls)
   3. As hitherto, the software exporters can generate SOFTEX form number (single as well as bulk) for use in off-site software exports from the website rbi.org.in.