Insights
SEBI clarification on holding of depository receipts by non-resident Indians
December 21, 2020SEBI has revised the framework for issue of Depository Receipts (DRs) to provide that a permissible holder of DRs includes its beneficial owners and such holder of DRs should be a person who is not resident in India and not a Non-Resident Indian (NRI). However, this restriction will not apply to DRs issued by a listed company to NRIs pursuant to share-based employee benefit schemes implemented by a company in terms of SEBI (Share Based Employee Benefits) Regulations, 2014, and in case of issue of DRs to NRIs pursuant to a bonus issue or a rights issue. The onus of identification of NRI holders, who are issued DRs in terms of the employee benefit scheme, would lie with the listed company. Except as aforesaid, NRIs shall neither subscribe to any further issue of DRs nor make any further acquisition of DRs (including of DRs issued prior to 10 October 2019).
To refer to SEBI circular dated 18 December 2020, click here.
