Section 22 in The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004
22. Permission for purchase/acquisition of foreign securities in certain cases. - (1) A person resident in India being an individual may acquire foreign securities--
(i)by way of gift from a person resident outside India; or(ii)issued by a company incorporated outside India under Cashless Employee Stock Option Scheme:Provided it does not involve any remittance from India; or(iii)by way of inheritance from a person whether resident in or outside India.(2)[ A person resident in India, being an individual, who is an employee or a director of Indian office or branch of a foreign entity or of a subsidiary in India of a foreign entity or of an Indian company in which foreign entity has direct or indirect equity holding, may accept the shares offered by such foreign entity provided that:(i)the shares under the ESOP Scheme are offered by the issuing company globally on uniform basis, and(ii)an Annual Return is submitted by the Indian company to the Reserve Bank through the Authorised Dealer bank giving details of remittances! beneficiaries etc.Explanation: - For the purpose of this sub-regulation, 'indirect' means 'indirect foreign equity holding through a trust/special purpose vehicle/a step down subsidiary'.](3)[ An authorised dealer bank may allow the remittance by the person eligible to purchase the shares in terms of sub-regulation (2) for acquiring shares under ESOP Schemes, irrespective of the method of the operationalisation of the scheme: [Substituted by Notification No. G.S.R. 13 (E) dated 9.10.2007 (w.e.f. 19.11.2014)]Provided that the conditions specified in that sub-regulation are fulfilled.(4)A person resident in India may transfer by way of sale the shares acquired in terms of sub-regulations (2) and (3) above:Provided that the proceeds thereof are repatriated immediately on receipt thereof and in any case not later than 90 days from the date of sale of such securities.](5)[ A foreign company, who has issued the shares in terms of sub--regulation (2) of this regulation may repurchase the same provided that:(i)the shares were issued in accordance with the rules/regulations framed under Foreign Exchange Management Act, 1999;(ii)the shares are being repurchased in terms of the initial offer document; and(iii)an annual return is submitted through the authorised dealer bank giving details of remittances/beneficiaries, etc.(6)An authorised dealer bank may allow the remittance by the person eligible to purchase the shares in terms of sub-regulation (2).] [ Inserted by G.S.R. 13(E), dated 9.10.2007 (w.r.e.f. 5.4.2006).](7)[ (i) A Domestic Depository may acquire, hold and transfer equity shares of eligible company resident outside India, being the underlying shares for the purpose of issuing IDRs as may be authorised by such company or its Overseas Custodian Bank.(ii)A person resident in India may redeem IDRs issued by an eligible company resident outside India through a Domestic Depository, subject to compliance of the following conditions with respect to the underlying shares on redemption:(a)Listed Indian companies may either sell or continue to hold the' underlying shares subject to the terms and conditions as per Regulations 6B and 7 of the Notification No. FEMA.120IRB-2004 dated July 7, 2004, as amended from time to time.(b)Indian Mutual Funds, registered with SEBI may either sell or continue to hold the underlying shares subject to the terms and conditions as per Regulation 6C of the Notification No. FEMA.120IRB 2004 dated July 7, 2004, as amended from time to time.(c)Other persons .resident in India including resident individuals may hold the underlying shares only for the purpose of sale within a period of 30 days from the date of conversion of the IDRs into underlying shares.]
