The Foreign Exchange Management (Overseas Investment) Directions,2022 ("Directions"), have been amended to clarify the regulationssurrounding investments in overseas funds. The salient features of theamendment are set out as under:
- Investments, including sponsor contributions, in units of any overseasinvestment fund regulated by the host jurisdiction's financial sectorregulator, are classified as overseas portfolio investments. Thisprovision allows listed Indian companies and resident individuals toinvest in such funds.
- In International Financial Services Centres (IFSCs), unlisted Indianentities may also make investments in units or other instrumentsissued by investment funds.
- The Directions now permit both Indian entities and resident individualsto invest in units or other instruments issued by investment funds orvehicles established in IFSCs. This change expands the scope ofpermissible investors to include unlisted Indian entities.
The amendments aim to provide clarity amid diverse regulatoryframeworks governing investment funds across various jurisdictions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
