Non-Resident Indian (NRI) means a “person residing outside India” who is a citizen of India or is a person of Indian origin” [as per FEMA regulations].

Yes, NRI can purchase shares or convertible debenture of an Indian Company through stock exchanges, under the portfolio investment scheme on a repatriation and /or non-repatriation basis.

Yes, NRI/PIO can invest in other securities namely

Dated Government securities (other than bearer securities) or treasury bills.

Units of domestic mutual funds.

Bonds issued by a public sector undertaking (PSU) in India.

Shares in Public Sector Enterprises being disinvested by the Government of India.

Yes, NRIs are allowed to invest in Exchange Traded Funds (ETFs). NRIs can invest in ETFs both on repatriation as well as on a non-repatriation basis.

For the purposes of investments in shares/securities in India, a person of Indian origin means a citizen of

any country other than Pakistan or Bangladesh, if

a. he/she at any time, held an Indian passport; or

b. he/she or either of his/her parents for any of his/her grandparents was a citizen of India by virtue of the constitution of India or Citizenship Act, 1955 (57 of 1995); or

C. the person is a spouse of an Indian.

As per Reserve Bank of India (RBI) guidelines, NRI who wishes to invest in shares in India through a stock exchange need to approach the designated branch of any authorized dealer (bank) authorized by reserve bank to administer the PIS (Portfolio Investment Scheme) to open an NRE (Non-Resident External) /NRO (Non-Resident Ordinary) account under the scheme for routing Investments.

Portfolio Investment Scheme (PIS) is a scheme of the reserve bank of India under which -Non-Resident Indian (NRIs) can purchase/sell shares/convertible debentures of Indian companies on Stock Exchanges under the Portfolio Investment Scheme. For this purpose, the NRI/PIO has to apply to a designated branch of a bank, which deals in Portfolio Investment. All sale/purchase transactions are to be routed through the designated branch

Yes, PIOs and OCIs do have parity with NRIs in respect of all facilities available to the NRIs in the economic, financial, and educational fields except in matters relating to the acquisition of agricultural/ plantation properties.

OCBs have been prohibited from making investments under Portfolio Investment Scheme. OCBs have been de-recognized as a class of investor entities w.e.f. September 16, 2003. Further, the OCBs which have already made investments under the PIS are allowed to continue holding such shares/convertible debentures till such time these are sold on the stock exchange

List of documents to be taken while registering NRI/PIO/OCI Clients as may be applicable

1. Document ensuring the status of the entity

o In case of Indian passport – Valid passport, Place of birth as India, Valid Visa – Work/Student/employment/resident permit etc.

o In case of foreign passport: Valid passport and any of the following

 Place of Birth as India in foreign passport

 Copy of PIO / OCI Card as applicable in case of PIO/OCI

2. PIS Permission Letter from the respective designated bank

3. PAN Card

4. Overseas Address: Driving License/ Foreign Passport /Utility Bills/Bank statement (not more than 2 months old)/ Notarized copy of rent agreement/ leave & license agreement/ Sale deed.

5. Photograph of Investor.

6. Proof of respective bank accounts & depository accounts.

In the case of NRI/PIO/OCI client, registration documents are required to be executed by client himself and not by the Power of Attorney Holder. In case of In-person verification of such clients, the members may obtain from such clients KYC documents attested by any one of the following entities – Indian Embassy/Consulate General in the country where the client resides, Notary Public, Court, Magistrate, Judge or Local banker

NRIs are allowed to invest in shares of listed Indian companies in recognized Stock Exchanges under the PIS.

NRIs can invest through designated ADs, on repatriation and non-repatriation basis under the PIS route up to 5 percent of the paid-up capital / paid-up value of each series of debentures of listed Indian companies.

The aggregate paid-up value of shares / convertible debentures purchased by all NRIs cannot exceed 10 percent of the paid-up capital of the company / paid-up value of each series of debentures of the company.

The aggregate ceiling of 10 percent can be raised to 24 percent, if the General Body of the Indian company passes a special resolution to that effect.

Yes, clients can have two separate trading accounts based on NRE & NRO.

Payment for purchase of shares and/or debentures on a repatriation basis has to be made by way of inward remittance of foreign exchange through normal banking channels or out of funds held in NRE/FCNR(B) account maintained in India. If the shares are purchased on a non-repatriation basis, the NRIs can also utilize their funds in the NRO account in addition to the above.

Yes. The issuing company may issue shares to NRI on the basis of specific or general permission from GoI/RBI. Therefore, individual NRI need not obtain any permission. While seeking the credit of sale proceeds to NRE/NRO account, the designated bank should be provided with the details regarding the date of allotment and cost of acquisition to calculate the taxes, if any.

Yes, NRIs are allowed to invest in the futures & options segment of the exchange out of Rupee funds held in India on a non-repatriation basis, subject to the limits prescribed by SEBI.

Yes, NRIs are allowed to invest in the futures & options segment of the exchange out of Rupee funds held in India on a non-repatriation basis, subject to the limits prescribed by SEBI.

No, Only “a person resident in India” as defined in section 2(v) of FEMA Act 1999 are allowed to participate in the currency derivative segment of the Exchange

FEMA provisions allow Indian companies to issue Rights / Bonus shares to existing non-resident shareholders, subject to adherence to sectoral cap as may be applicable.

An NRI, who wishes to trade on the F&O segment of the exchange, is required to approach the exchange through a clearing member, through whom the NRI would like to clear his trades for allotment of custodial participant (CP) code. The clearing corporation would assign a CP code to each NRI, based on the application received from the clearing member of the NRI. Trading members should ensure that at the time of order entry CP Code of the NRI is placed in the CP Code field of the trading system. The NRI client shall have only one clearing member at any given point in time.

Position limits would be applicable on the combined position in all derivative contracts on an underlying stock at an Exchange. Position limits for NRIs shall be the same as the client-level position limits specified by SEBI from time to time.

For Index-based contracts – Disclosure requirement for any persons or persons acting in concert who together own 15% or more of the open interest of all derivative contracts on a particular underlying index.

For Stock option and single stock futures contracts – The gross open position across all the derivative contracts for security for each specific client shall not exceed higher of:

1% of the free-float market capitalization (in terms of number of shares) OR

5% of the open interest in all derivative contracts in the same underlying stock (in terms of number of shares Search by company name, symbol, or keyword

Reserve Bank monitors the investment position of NRIs/FIIs in listed Indian companies, reported by designated banks, on a daily basis. When the total holdings of NRIs/FIIs under the Scheme reaches the limit of 2 percent below the sectoral cap, Reserve Bank will issue a notice (caution list) to all designated branches of designated banks cautioning that any further purchases of shares of the particular Indian company will require prior approval of the Reserve Bank.

Once the shareholding by NRIs/FIIs reaches the overall ceiling / sectoral cap /statutory limit, the Reserve Bank places the company in the Ban List. Once a company is placed in the Ban List, no NRI can purchase the shares of the company under the Portfolio Investment Scheme