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Proposed Guidelines on Cross Border Merger Transactions

The Reserve Bank of India has proposed the Regulations named Foreign Exchange Management (Cross Border Merger) Regulations, 2017 in order to address the issues that may arise when an Indian company and a foreign company enter into Scheme of merger, demerger, amalgamation, or rearrangement.

On 26th April, 2017, the Reserve Bank of India has placed on its website the draft guidelines proposed to be issued on cross border merger transactions pursuant to the Rules notified by Ministry of Corporate Affairs through Companies (Compromises, Arrangements and Amalgamation) Amendment Rules, 2017 on April 13, 2017.

The Reserve Bank makes some regulations relating to merger, demerger, amalgamation and arrangement between Indian companies and foreign companies as highlighted below:

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Position limits for cross currency futures and options contracts (other than Indian Rupee) on exchanges in IFSC

As per circular dated 17th may, 2017, Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015 were notified on 27th March 2017 and came into force on 1st April 2017. As per these guidelines, currency derivatives were specified as permissible securities in which dealing may be permitted by stock exchanges in IFSC (International Financial Services Centres).

Upon these guidelines, the position limits for eligible market participants has been decided in this circular to protect the interest of the investors in securities and to regulate the securities market. Stock exchange shall also impose penalty on eligible market participants for violation of position limits.

In case of cross currency futures and options (not involving Indian Rupee), the position limits for eligible market participants per currency pair per stock exchange are as follows:

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18 May 2017
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