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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

SMD/POLICY CIR-28/98
October 7, 1998

To:

Presidents/Executive Directors of
all the Stock Exchanges.

Dear Sir,

This has reference to our Circular No. SMD/SED/CIR/94/6669 dated October 31, 1994 requesting the Exchanges to ensure that no listing or trading permission is granted unless an unambiguous certificate is obtained from the company concerned that all the share certificates have been despatched.

Earlier, under the various schemes of NRI investments in Indian companies, the Reserve Bank used to grant permission to eligible companies for issue of shares to NRI investors in two stages. In the first stage, after establishing the eligibility of the applicant Indian company, the Reserve Bank granted `in-principle’ approval. The final approval to issue and export share certificates to NRI investors was granted in the second stage after the company submitted the list of investors, foreign inward certificates/bank certificates, etc., evidencing funds from abroad. Vide Press Release dated April 9, 1997 (copy enclosed) titled “RBI simplifies procedure for issue and export of shares by Indian Companies” RBI has provided that Indian Companies will no longer have to approach the Reserve Bank of India twice for seeking permission for issue an export of shares to NRI investors and has decided to grant such permissions to eligible companies in one stage in order to expedite the process of issue and export of shares to NRI investors as also to simplify the existing procedure.

The Stock Exchanges are advised to take note of change in the procedure by RBI for issue and export of shares by Indian companies to NRI investors as provided in the referred Press Release and ensure compliance regarding obtaining certificate from the Company that all share certificates including certificate to NRI investors have been despatched before listing or trading permission is granted.

Yours faithfully,

P. K. BINDLISH
DIVISION CHIEF
SECONDARY MARKET, DEPOSITORY
RESEARCY & PUBLICATION DEPARTMENT

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