Foreign Exchange Management (Transfer or Issue of any Foreign Security) (Fourth Amendment) Regulations, 2009 - Amendment of Regulations 7

Notification No. G.s.r. 609(e), dated 28-7-2009

In exercise of the powers conferred by clause (a) of sub-section (3) of Section 6 and Section 47 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India hereby makes the following amendments in the Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 (Notification No. FEMA. 120/RB-2004 dated July 7, 2004), namely:—

1. Short Title and Commencement:—(i) These Regulations shall be called the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) (Fourth Amendment) Regulations, 2009.

(ii) These Regulations shall be deemed to have come into effect from the 6th day of September, 2006.

2. Amendment of Regulation 7—In the principal Regulations, in Regulation 7, for the sub-regulation (1), the following shall be substituted, namely :

"(1) Subject to the Regulations in Part I, an Indian Party engaged in financial services sector in India may make investment in an entity outside India :

Provided that the Indian party

(i) has earned net profit during the preceding three financial years from the financial services activities;

(ii) is registered with the regulatory authority in India for conducting the financial services activities;

(iii) has obtained approval from the concerned regulatory authorities both in India and abroad, for venturing into such financial sector activity;

(iv) has fulfilled the prudential norms relating to capital adequacy as prescribed by the concerned regulatory authority in India."