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SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, A Wing, Gr. Floor,
224, Nariman Point, Mumbai 400 021

SMDRP/Policy/Cir-9/99
May 6, 1999

 To:

The President/Executive Director Managing Director of all the Stock Exchanges/Depositories/Custodians AMFI/RAIN

Dear Sir,

Sub.: Delivery of underlying shares of GDRs/ADRs in dematerialised form.

At the meeting of the Working Group held on held on July 17,1998, it was decided that delivery of underlying shares of GDRs/ADRs shall compulsorily be in dematerialised form. The matter was referred to Reserve Bank of India (RBI). The RBI has issued two notifications on the subject permitting:

1. a  non-resident holder of ADRs/GDRs issued by a company registered in India, to acquire, upon surrendering ADRs/GDRs, the underlying shares when such shares are released by the Indian Custodian of the ADR/GDR issue, and

2. the company whose shares are so released, or a depository defined in clause (2) of sub-section (1) of Section 2 of the Depositories Act, 1996 to enter in its register or books, in which securities are registered or inscribed, an address outside India of the non-resident holder of shares.

RBI has further clarified that there would not be any obstacle from FERA angle in the process of dematerialisation as the above mentioned notifications have issued to take care of the same. Copies of the notifications are enclosed herewith.

It has therefore been decided that henceforth delivery of underlying shares of GDRs/ADRs shall compulsorily be in dematerialised form. Stock Exchanges shall not accept delivery of underlying shares of GDRs/ADRs in physical form.

Yours faithfully,

P. K. Kuriachen
DIVISION CHIEF
SECONDARY MARKET, DEPOSITORY
RESEARCH & PUBLICATIONS DEPARTMENT

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