MODIFIED REPORTING MECHANISM

The Reserve Bank of India has stipulated the following in respect of transfer of shares/Preference
shares/Convertible Debentures by way of sale:

• In case of transfer of shares from a resident to a non-resident / non-resident Indian and vice versa, the transferee / his duly appointed agent is required to approach the investee company to record the transfer in their books along with the certificate in form FC-TRS from the designated AD branch that the remittances have been received by the transferor / payment has been made by the transferee. It may be noted that "preference shares" mean compulsorily and mandatory convertible preference shares and "debenture" means compulsorily and mandatory convertible debentures. The form FC-TRS has been revised .
• It has been decided that henceforth, the form FC- TRS should be submitted to the AD Category - I bank, within 60 days from the date of receipt of the amount of consideration. The onus of submission of the form FC-TRS within the given time frame would be on the transferor / transferee, resident in India.
• In case of transfer of equity instruments where the non-resident acquirer proposes deferment of payment of the amount of consideration, prior approval of the Reserve Bank would be required, as hitherto.