Central Government notifies instruments which can be considered as debt and non-debt instruments under Foreign Exchange Management Act, 1999.
MINISTRY OF FINANCE
(Department of Economic Affairs)
New Delhi, the 16th October, 2019
S.O. 3722(E).—In exercise of the powers conferred by sub-section (7) of section 6 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government hereby determines the following instruments as debt instruments, namely:—
(i) Government bonds;
(ii) corporate bonds;
(iii) all tranches of securitisation structure which are not equity tranche;
(iv) borrowings by Indian firms through loans;
(v) depository receipts whose underlying securities are debt securities.
2. Instruments specified below shall be considered as non-debt instruments, namely:-
(i) all investments in equity in incorporated entities (public, private, listed and unlisted);
(ii) capital participation in Limited Liability Partnerships (LLPs);
(iii) all instruments of investment as recognised in the FDI policy as notified from time to time;
(iv) investment in units of Alternative Investment Funds (AIFs) and Real Estate Investment Trust (REITs) and Infrastructure Investment Trusts (InVITs);
(v) investment in units of mutual funds and Exchange-Traded Fund (ETFs) which invest more than fifty per cent in equity;
(vi) the junior-most layer (i.e. equity tranche) of securitisation structure;
(vii) acquisition, sale or dealing directly in immovable property;
(viii) contribution to trusts;
(ix) depository receipts issued against equity instruments.
3. All other instruments which are not specified in paragraphs (1) and (2) above, shall be deemed as debt instruments.
ANAND MOHAN BAJAJ, Jt. Secy.