Transfer of Equity Shares

SEBI has vide its circular dated 11th February, 2019 relaxed the mandatory requirement of providing Permanent Account Number (PAN) in respect of transfer of equity shares in listed entities. Hitherto it was a mandatory requirement for all transferees to provide PAN in respect of physical transfer of shares. Now it has been relaxed for Non Resident Indians (NRIs), Overseas Citizens of India (OCIs), Persons of Indian Origin (PIOs) and foreign nationals, subject to some conditions.

The conditions are:

a. The relaxation shall only be available for transfers executed after January 01, 2016.

b. The relaxation shall only be available to non-commercial transactions, i.e. transfer by way of gift among immediate relatives.

c. The non-resident shall provide copy of an alternate valid document to ascertain identity as well as the non-resident status.

d. The transfer of shares is to their immediate relatives only.

For the purpose of Para 3(b) above, the term “immediate relative” shall shave the same meaning as defined in Regulation 2(1)(l) of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

A copy of this circular can be found here

Liberalised Remittance Scheme

RBI has vide its circular dated 19th June, 2018 mandated that furnishing of PAN is necessary document while allowing all remittances outside India under the Liberalised Remittance Scheme (LRS). Hitherto, for remittances under US$25,000/- PAN was not mandatory, Now it has become mandatory for any amount being remitted under the Scheme.

Gist of RBI circular is given below:

Please refer to paragraph 18 of the Statement on Developmental and Regulatory Policies of the Second Bi-monthly Monetary Policy Statement for 2018-19released on June 6, 2018. As indicated therein, it has been decided that furnishing of Permanent Account Number (PAN), which hitherto was not to be insisted upon while putting through permissible current account transactions of up to USD 25,000, shall now be mandatory for making all remittances under Liberalised Remittance Scheme (LRS).

2. Further, in the context of remittances allowed under LRS for maintenance of close relatives, it has been decided, in consultation with Government, to align the definition of ‘relative’ with the definition given in Companies Act, 2013 instead of Companies Act, 1956.

3. Master Direction No. 7/2015-16 dated January 01, 2016 on LRS is being updated simultaneously to reflect the above changes.

4. The directions contained in this circular have been issued under Sections 10(4), 11(1) and 11(2) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11309&Mode=0