Clarifications on Issue of Depository Receipts to NRIs

SEBI had, by its Circular dated October 10, 2019, prescribed the framework for issue of depository receipts, which inter alia barred non-resident Indians (‘NRIs’) from holding depository receipts issued by Indian companies. This Circular was discussed in our previous write-up available here. By its Circular dated December 18, 2020, SEBI has clarified that the above restriction will not apply to issue of depository receipts to NRIs pursuant to: (i) share based employee benefit schemes implemented in terms of the SEBI (Share Based Employee Benefits) Regulations, 2014; and (ii) a bonus or rights issue. Further, SEBI has clarified that the listed company will be responsible for identifying NRIs who are issued depository receipts under employee benefit schemes and for providing information of such NRI holders to the designated depository for the purpose of monitoring of limits.

Published In:Inter Alia - Quarterly Edition - December 2020 [ English Chinese
Date: December 31, 2020