Clarification on applicability of Chapter III of CA 2013 on issue of FCCB’s and FCB’s

The Ministry of Corporate Affairs has issued a General Circular No. 43/2014 w.r.t the clarification on applicability of Chapter III with reference to the Prospectus and Allotment of Securities under the Companies Act, 2013 on issue of Foreign Currency Convertible Bonds (FCCB’s)the matters  and Foreign Currency Bonds (FCB’s) by the India Companies to persons resident outside India in accordance with the sectoral specific regulations , as the Ministry has received a lot of representations for the same.

The matter has been duly examined in consultation with the Ministry of finance and SEBI and further it is expressly clarified that the issue of FCCB’s and FCB’s is regulated by the Ministry of Finance Regulations and Reserve Bank of India sectoral specific guidelines and regulations.

Hence, it is accordingly clarified that unless expressly provided in the scheme or the directions or regulations issued by the Reserve Bank of India the provisions of Chapter III shall not apply to an issue of FCCB or FCB made exclusively to the persons resident outside India.

The Circular containing the above details can also be accessed at the link given below.

Issue of Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency Bonds (FCBs) – Clarification regarding applicability of provisions of Chapter III of the Companies Act, 2013

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