FEMA Updates

A.P. (DIR Series) Circular No. 04 dated May 12, 2021

Sponsor Contribution to an AIF set up in overseas jurisdiction including IFSCs:

It has been decided that any sponsor contribution from a sponsor Indian Party (IP) to an Alternative Investment Fund (AIF) set up in an overseas jurisdiction, including International Financial Services Centre (IFSC) in India, as per the laws of host jurisdiction, will be treated as Overseas Direct Investment (ODI).

Accordingly, IP as defined in Regulation 2(k) of Notification FEMA 120 can set up AIF in overseas jurisdictions including IFSCs under the automatic route provided it complies with Regulation 7 of Notification FEMA 120.

A.P. (DIR Series) Circular No. 05 dated May 31, 2021

Investment by Foreign Portfolio Investors (FPI) in Government Securities: Medium Term Framework (MTF):

Investment Limits for FY 2021-22:

1. The limits of FPI investment in Government Securities (G-Secs) and State Development Loans (SLIs) shall remain unchanged at 6% and 2% respectively of outstanding stocks of securities for FY 2021-22.
2. All investments by eligible investors in “specified securities” shall be reckoned under the Fully Accessible Route.
3. The allocation of incremental changes in the G-sec limit (in absolute terms) over the two sub-categories – ‘General’ and ‘Long-term’ – shall be retained at 50:50 for FY 2021-22.
4. The entire increase in limits for SDLs (in absolute terms) has been added to the ‘General’ sub-category of SDLs.

The revised limits for all categories shall be as under:

Table I – Investment Limits for FY 2021-22
All figures in Rs. Crore
	G-Sec General	G-Sec Long Term	SDL General	SDL Long Term	Corporate Bonds	Total Debt
Current FPI	2,34,531	1,03,531	67,630	7,100	5,41,488	9,54,280
Limits^
Revised Limit for	2,43,914	1,12,914	76,766	7,100	5,74,263	10,14,957
HY Apr 2021-Sept 2021
Revised Limit for	2,53,928	1,22,298	85,902	7,100	6,07,039	10,75,637
HY Oct 2021-Mar 2022

A.P. (DIR Series) Circular No. 07 dated June 17, 2021

Liberalized Remittance Scheme for Resident Individuals – Reporting:

AD bank were required to upload the data in respect of number of applications received and total amount remitted under LRS on Online Return Filing Scheme (ORFS).

It has now been decided to collect this information in XBRL system instead of the ORFS. AD Bank shall upload the requisite information on XBRL system on or before 5th of succeeding month from Jul 01, 2021 onwards.