RBI/2007-2008/274 A.
P. (DIR Series) Circular No. 34 April 03, 2008 To All
Category – I Authorised Dealer Banks Madam / Sir, Overseas
Investment by Mutual Funds - Liberalisation Attention
of Authorised Dealer Category – I (AD Category - I) banks is invited to Regulation
6C and Regulation 26 of Notification
No .FEMA 120/RB-2004 dated 7th July 2004, [Foreign Exchange Management
(Transfer or issue of Any Foreign Security) Regulations, 2004] as amended from
time to time (the Notification) and A.
P. (DIR Series) Circular No. 97 dated 29th April 2003, A.
P. (DIR Series) Circular No. 3 dated 26th July 2006, A. P. (DIR
Series) Circular No. 16 dated 11th November 2006, A.
P. (DIR Series) Circular No. 53 dated 8th May 2007, A.
P. (DIR Series) Circular No. 72 dated 8th June 2007 and A.
P. (DIR Series) Circular No.12 dated 26th September 2007 regarding
overseas investments by Mutual Funds. 2. With a view to
providing greater opportunity for investment overseas, the aggregate ceiling for
overseas investment by Mutual Funds registered with the Securities and Exchange
Board of India (SEBI) has been enhanced from USD 5 billion to USD 7 billion with
immediate effect. The existing facility to allow a limited number of qualified
Indian Mutual Funds to invest cumulatively up to USD 1 billion in overseas Exchange
Traded Funds, as may be permitted by SEBI, shall continue. The investments would
be subject to the terms and conditions and operational guidelines as issued by
SEBI. 3. The monthly reporting requirement to the Reserve
Bank as stipulated vide A.
P. (DIR Series) Circular No.3 dated 26th July 2006 and modified
vide A.
P. (DIR Series) Circular No.72 dated 8th June 2007 would continue
for statistical purposes with appropriate modifications to include the additional
categories of investments allowed vide A.
P. (DIR Series) Circular No.12 dated 26th September 2007. AD Category
– I banks may note to submit monthly report to Reserve Bank on or before the tenth
of the following month. Non-submission of the report would be viewed seriously
by the Bank. 4. AD Category – I banks may bring the contents
of this circular to the notice of their constituents and customers concerned. 5.
The directions contained in this circular have been issued under Sections 10(4)
and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without
prejudice to permissions/approvals, if any, required under any other law. Yours
faithfully, (Salim Gangadharan) Chief General Manager-in-Charge |
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