On May 17, 2018 vide Circular No. IMD/FPIC/CIR/P/2018/81, SEBI has issued an amendment to the SEBI Circular No. IMD/FPIC/CIR/P/2018/61 dated April 5, 2018 (“5th April SEBI Circular”) and Circular No. IMD/FPIC/CIR/P/2018/74 dated April 27, 2018 (“27th April SEBI Circular”) on Monitoring of Foreign Investment Limits in Listed Indian Companies.  

1. SEBI had previously introduced a new system for monitoring of foreign investment limits  for listed Indian companies vide the 5th April SEBI Circular (key points regarding this Circular are set out in paragraph 4 below) and prescribed guidelines for the necessary infrastructure and data to be provided by Indian listed companies and other related matters. 
2. SEBI has already once extended the deadlines prescribed under 5th April SEBI Circular for Indian companies to provide the requisite information for compliance with the said circular and for operationalizing the new system through an amendment issued vide the 27th April SEBI Circular. 
3. At the request of various stakeholders, SEBI has now further extended the deadlines for compliance with the 5th April SEBI Circular and decided as follows: 

3.1. The deadline for the listed Indian companies to provide the necessary data to the depositories was extended to May 25, 2018.
3.2. The new system for monitoring foreign investment limits in listed Indian companies is required to be made operational on June 1, 2018. 

4. To set a backdrop, SEBI vide 5th April SEBI Circular stated that pursuant to FEMA, the onus of compliance with the various foreign investment limits rests on the Indian company. In order to facilitate the listed Indian companies to ensure compliance with the various foreign investment limits, SEBI in consultation with RBI mandated to put in place a new system for monitoring the foreign investment limits. The architecture of the new system was set out under Annexure A of the 5th April SEBI Circular. Annexure A requires, inter alia, that all Indian listed companies choose a designated depository to facilitate the monitoring of foreign investments, storing the information in a Company Master Data Base, flagging the breach of foreign investment limits to the relevant stock exchanges and prescribes a method of disinvestment in case a listed company is in breach of the sectoral caps and limits on the foreign investment.  In addition the following was mandated: 

i) The depositories (NSDL and CDSL) were required to put in place the necessary infrastructure and IT systems for operationalizing the monitoring mechanism described in Annexure A of the 5th April SEBI Circular. The Stock Exchanges (BSE, NSE and MSEI) were also required to put in place the necessary infrastructure and IT systems for disseminating information on the available investment headroom in respect of listed Indian companies.

ii) The depositories were required to issue the necessary circulars and guidelines for collecting data on foreign investment from listed companies. The companies were required to provide the necessary data (as mentioned in Annexure A of the 5th April SEBI Circular) to the depositories latest by April 30, 2018.

iii) The new system for monitoring foreign investment limits in listed Indian companies was to be made operational on May 1, 2018. The existing mechanism for monitoring the foreign investment limits was required to be replaced with the new system once the new system had been operationalized.  

5. Therefore, pursuant to the current  amendment to the 5th April SEBI Circular, the May 15, 2018 deadline (as prescribed under the 27th April SEBI Circular) for companies to provide necessary information to the depositories has been further extended to May 25, 2018 and the May 18, 2018 deadline (as prescribed under the 27th April SEBI Circular) for operationalization of the new monitoring system has been further extended to June 1, 2018.