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April 2008

Press Note No. 2 (2008), dated 12-3-2008 — Guidelines for foreign Investment in Commodity Exchanges.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi
Chartered Accountants
Reading Time 1 mins
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Part C : RBI/FEMA

Given below are the highlights of 6 Press Notes issued by the
Ministry of Commerce & Industry.


17 Press Note No. 2 (2008), dated 12-3-2008
— Guidelines for foreign Investment in Commodity Exchanges.

The guidelines for foreign investment in Commodity Exchanges
are :



1. Foreign investment i.e., Foreign Direct
Investment (FDI) and Portfolio Investment Scheme (PIS) is allowed up to 49%
after obtaining prior approval from FIPB.

2. Investment by FII under PIS will be limited to 23% and
they can buy only in the secondary market.

3. Investment under FDI will be limited to 26%.

4. No foreign investor/entity, including persons acting in
concert, can hold more than 5% of the equity in these companies.



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