Securities And Exchange Board Of India - Subsection
Section 20(4) in Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019
(4)In respect of investments in the secondary market, the following additional conditions shall apply -(a)A foreign portfolio investor shall transact in the securities in India only on the basis of taking and giving delivery of securities purchased or sold;(b)Nothing contained in clause (a) shall apply to -(i)any transactions in derivatives on a recognized stock exchange;(ii)short selling transactions in accordance with the framework specified by the Board;(iii)any transaction in securities pursuant to an agreement entered into with the merchant banker in the process of market making or subscribing to unsubscribed portion of the issue in accordance with Chapter IX of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;(iv)any other transaction specified by the Board;(c)The transaction involving dealing in securities by a foreign portfolio investor shall be only through stock brokers registered with the Board;(d)Nothing contained in clause (c) of this sub-regulation shall apply to -(i)transactions in Government securities and such other securities falling under the purview of the Reserve Bank of India carried out in the manner as specified by the Reserve Bank of India;(ii)sale of securities in response to a letter of offer sent by an acquirer in accordance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;(iii)sale of securities in response to an offer made by any promoter or acquirer in accordance with the Securities and Exchange Board of India (Delisting of Equity shares) Regulations, 2009;(iv)sale of securities in accordance with the Securities and Exchange Board of India (Buy-back of Securities) Regulations, 2018;(v)divestment of securities in response to an offer by Indian companies in accordance with Operative Guidelines for Disinvestment of Shares by Indian Companies in the overseas market through issue of American Depository Receipts or Global Depository Receipts as notified by the Government of India from time to time;(vi)any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by the Central Government or any State Government;(vii)any transaction in securities pursuant to an agreement entered into with merchant banker in the process of market making or subscribing to unsubscribed portion of the issue in accordance with Chapter IX of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;(viii)transactions in corporate bonds by foreign portfolio investors;(ix)transactions on the electronic book provider platform of recognised stock exchanges;(x)transactions to receive, hold and sell unlisted securities as referred at regulation 20(2) and transactions in unlisted securities received through involuntary corporate actions including a scheme of a merger or demerger approved in accordance with the provisions of the Companies Act, 2013 as well as the applicable guidelines issued by the Board or pursuant to implementation of any resolution plan approved under the Insolvency and Bankruptcy Code, 2016 or in accordance with the guidelines issued by the Government of India or the Reserve Bank of India or any other regulator for a scheme of debt resolution:Provided that such unlisted holdings of the foreign portfolio investor shall be treated as Foreign Direct Investment;(xi)transactions for transfer of right entitlements;(xii)purchase or sale transactions of illiquid or suspended or delisted securities by a foreign portfolio investor;Explanation. - Illiquid securities shall mean those securities that are not frequently traded in terms of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;(xiii)transactions between registered foreign portfolio investors, who are multi investment manager structure of the same beneficial owner and have common Permanent Account Number; and(xiv)any other transaction as may be specified by the Board;(e)A foreign portfolio investor shall hold, deliver or cause to be delivered securities only in the dematerialized form:Provided that any shares held in the physical form, before the commencement of these regulations, may continue to be held in the physical form, if such shares cannot be dematerialised:Provided further that all the Rights Entitlements may be held or transferred in non-dematerialized form.
