On Friday, the Securities and Exchange Board of India (SEBI) provided certain relaxations to non-resident Indians in respect of holding of depository receipts (DRs) issued by India-listed companies.
NRIs (non-resident Indians) can now hold DRs issued by the company under the employee stock option schemes, bonus issue and rights issue, the market regulator said.
In October 2019, SEBI barred NRIs from buying DRs issued by India-listed companies.
This restriction will not apply in the case of issue of DRs to NRIs, pursuant to share-based employee benefit schemes that are implemented by a company in terms of SEBI (Share Based Employee Benefits) rules, the regulator said in a circular on Friday.
In addition, the restriction would also not apply in the case of issue of DRs by the company to NRIs following a bonus issue or a rights issue, it added.
"Except as permitted under the provisos above, NRIs shall neither subscribe to any further issue of DRs nor make any further acquisition of DRs (including of DRs issued prior to October 10, 2019)," the regulator clarified.
It further said the onus of identification of NRI holders, who are issued DRs in terms of employee benefits scheme, would lie with the listed company.
The company would provide the information of such NRI DR holders to the designated depository for the purpose of monitoring of limits, SEBI said.
Depository receipt is a foreign currency-denominated instrument, listed on an international exchange, issued by a foreign depository to a domestic custodian and includes global depository receipts (GDRs).