Securities and Exchange Board of India (Foreign Institutional Investors) (Amendment) Regulations, 2004 F.No SEBI\LAD\DOP\19023\2004 In exercise of the powers conferred by section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the Securities and Exchange Board of India (Foreign Institutional Investors ) Regulations, 1995, namely: - 1. (i) These regulations may be called the Securities and Exchange Board of India (Foreign Institutional Investors) (Amendment) Regulations, 2004 (ii) They shall come into force on 3rd February 2004 2. (i) In the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, (a) after regulation 15, a new regulation shall be inserted, namely: - "15A. (1) A Foreign Institutional Investor or sub account may issue, deal in or hold, off-shore derivative instruments such as Participatory Notes, Equity Linked Notes or any other similar instruments against underlying securities, listed or proposed to be listed on any stock exchange in India, only in favour of those entities which are regulated by any relevant regulatory authority in the countries of their incorporation or establishment, subject to compliance of "know your client" requirement: Provided that if any such instrument has already been issued, prior to 3rd February 2004, to a person other than a regulated entity, contract for such transaction shall expire on maturity of the instrument or within a period of five years from 3rd February, 2004, whichever is earlier. (2) A Foreign Institutional Investor or sub account shall ensure that no further down stream issue or transfer of any instrument referred to in sub-regulation (1) is made to any person other than a regulated entity."
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