SECURITIES
(FOREIGN
VENTURE CAPITAL INVESTORS) REGULATIONS, 2000
CONTENTS
CHAPTER
I: PRELIMINARY
1.
Short title and commencement
2.
Definitions
CHAPTER
II: REGISTRATION OF FOREIGN VENTURE CAPITAL INVESTORS
3.
Application for grant of certificate
4. Eligibility Criteria
4A.Criteria
for fit and proper person
5.
Furnishing of information,
clarification
6.
Consideration of application
7.
Procedure for grant of certificate
8.
Conditions of certificate
9.
Procedure where certificate is not
granted
10.
Effect of refusal to grant certificate
CHAPTER
11. Investment Criteria for a Foreign Venture
Capital Investor
CHAPTER
IV: GENERAL OBLIGATIONS
12. Maintenance of books and records
13. Power to call for information
14. General Obligations and Responsibilities
15. Appointment of designated bank
CHAPTER
V: INSPECTION
16. Board's right to inspect or investigate
17. Obligation of Foreign Venture Capital
Investor on investigation or inspection by Board
18. Submission of the Report
19. Board's right to issue any direction to
Foreign Venture Capital Investor
CHAPTER
VI: PROCEDURE FOR ACTION IN CASE OF DEFAULT
20. Board's right to suspend or cancel
certificate of registration
21. Suspension of certificate
22. Cancellation of certificate
23. Manner of making order of cancellation or
suspension
[24.Omitted by the Securities (Procedure for
Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002
25. Omitted
by the Securities (Procedure for Holding Enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002
26. Omitted
by the Securities (Procedure for Holding Enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002
27. Omitted
by the Securities (Procedure for Holding Enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002]
28. Action against intermediary
29. Appeal to Securities Appellate Tribunal
FIRST
SCHEDULE: FORMS
SECOND
SCHEDULE: FEES
THIRD
SCHEDULE: NEGATIVE LIST
THE
GAZETTE OF
EXTRA
ORDINARY
PART II
SECTION 3
PUBLISHED
BY AUTHORITY
MUMBAI
THE 15th
NOTIFICATION
SECURITIES
(FOREIGN
VENTURE CAPITAL INVESTORS) REGULATIONS, 2000
S.O. 832 (E). In exercise of the powers
conferred by sub-section (1) of Section 30 of the Securities and Exchange Board
of India Act, 1992 (15 of 1992), the Securities and Exchange Board of India
hereby makes the following regulations namely:-
CHAPTER
I
PRELIMINARY
Short title and
commencement.
1. (1) These regulations may be
called the Securities and Exchange Board of India (Foreign Venture Capital
Investor) Regulations, 2000.
(2) They shall come into force on the date of their publication in the
Official Gazette.
Definitions.
2. (1) In these regulations,
unless the context otherwise requires,─
(a) "Act" means the Securities and Exchange Board of India
Act, 1992 (15 of 1992);
(b) "certificate" means a certificate of registration
granted by the Board under regulation 7;
(c) "designated bank" means any bank in
(d) "domestic custodian" means a person registered under the
Securities and Exchange Board of India (Custodian of Securities) Regulations,
1996;
(ee) "Inspection or Investigation Officer"
means an officer appointed by the Board, under regulation 16;]
(f) "equity linked instruments" includes instruments
convertible into equity share or share warrants, preference shares, debentures
compulsorily; [3][or
optionally] convertible into equity;]
[4][(g) "foreign venture capital investor" means an investor
incorporated and established outside
(h) "form" means any of the forms set out in the First
Schedule;
(i) "investible
funds" means the fund committed for investments in
(j) "negative list" means a list of items as specified in
Third Schedule;
(k) "Schedule" means a schedule annexed to these regulations;
(l) "Venture Capital Fund" means a Fund established in the
form of a Trust, a company including a body corporate and registered under
Securities and Exchange Board of India (Venture Capital Fund) Regulations,
1996, which
(i)
has a dedicated pool of capital;
(ii) raised in the manner
specified under the Regulations; and
(iii) invests [5][*
* *] in accordance with the Regulations;
(m) "venture capital
undertaking" means a domestic company:─
(i)
whose shares are not listed in a recognised stock exchange in
(ii) which is engaged in the business of providing services, production
or manufacture of articles or things, but does not include such activities or
sectors which are specified in the negative list by the Board, with approval of
Central Government, by notification in the Official Gazette in this
behalf."
(2) Words and expressions used and not defined in these regulations but
defined in the Act or Securities and Exchange Board of India (Venture Capital
Funds) Regulations, 1996 shall have the same meaning as are respectively
assigned to them in the Act or the said regulations.
CHAPTER
II
REGISTRATION
OF FOREIGN VENTURE CAPITAL INVESTORS
Application for grant of
certificate.
3. For the purposes of seeking
registration under these regulations, the applicant shall make an application
to the Board in Form A along with the application fee as specified in Part A of
the Second Schedule to be paid in the manner specified in Part B thereof.
Eligibility Criteria.
4. (1) For the purpose of the
grant of a certificate to an applicant as a Foreign Venture Capital Investor,
the Board shall consider the following conditions for eligibility, namely:-
(a) the applicants track record, professional competence, financial
soundness, experience, general reputation of fairness and integrity.
(b) Whether the applicant has been granted necessary approval
by the Reserve Bank of
(c) whether the applicant is an investment company, investment trust,
investment partnership, pension fund, mutual fund, endowment fund, university
fund, charitable institution or any other entity incorporated outside India; or
(d) whether the applicant is an asset management company,
investment manager or investment management company or any other investment
vehicle incorporated outside India; [7][*
* *]
(e) whether the applicant is authorised
to invest in venture capital fund or carry on activity as a 8*[foreign venture
capital investors]; [8][*
* *]
(f) whether the applicant is regulated by an appropriate foreign
regulatory authority or is an income tax payer; or submits a certificate from
its banker of its or its promoter’s track record where the applicant is neither
a regulated entity nor an income tax payer.
(g) the applicant has not been refused a certificate by the
Board.
(h) whether the applicant is a fit and proper person.
[9][Criteria for fit and proper person].
4A. For the purposes of
determining whether an applicant or the foreign venture capital investor is a
fit and proper person the Board may take into account the criteria specified in
Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations,
2008.]
Furnishing of
information, clarification.
5. The Board may require the
applicant to furnish such further information as it may consider necessary.
Consideration of
application
6. An application which is not
complete in all respects shall be rejected by the Board:
Provided that, before rejecting any such
application, the applicant shall be given an opportunity to remove, within
thirty days of the date of receipt of communication, the objections indicated
by the Board.
Provided further that the Board may, on being
satisfied that it is necessary to extend the period specified above may extend
such period not beyond ninety days.
Procedure for grant of
certificate.
7. (1) If the Board is
satisfied that the applicant is eligible for the grant of certificate, it shall
send an intimation to the applicant.
(2) On receipt of intimation, the applicant shall pay to the Board, the
registration fee specified in Part A of the Second Schedule in the manner
specified in Part B thereof.
(3) The Board shall on receipt of the registration fee grant a
certificate of registration in Form B.
Conditions of
certificate.
8. The certificate granted to
the foreign venture capital [10][investor]
under regulation 7 shall be inter alia,
subject to the following conditions, namely:-
(a) it shall abide by the
provisions of the Act, and these regulations;
(b) it shall appoint a
domestic custodian for purpose of custody of securities;
(c) it shall enter into
arrangement with a designated bank for the purpose of operating a special
non-resident rupee or foreign currency account.
(d) it shall forthwith
inform the Board in writing if any information or particulars previously
submitted to the Board are found to be false or misleading in any material
particular or if there is any change in the information already submitted.
Procedure where
certificate is not granted.
9. (1) On considering an
application made under regulation 3, if the Board is of the opinion that a
certificate should not be granted, it may reject the application after giving
the applicant a reasonable opportunity of being heard.
(2) The decision of the Board to reject the application shall be
communicated to the applicant.
Effect of refusal to
grant certificate.
10. Any applicant whose
application has been rejected under regulation 9 shall not carry on any
activity as a Foreign Venture Capital Investor.
CHAPTER
INVESTMENT
CONDITIONS
Investment Criteria for
a Foreign Venture Capital Investor.
11. All investments to be made
by a foreign venture capital investors shall be subject to the following
conditions:-
(a) it shall disclose to the Board its investment strategy.
(b) [11][*
* *] it can invest its total funds committed in one [12][foreign
venture capital investor] [13][*
* *].
(c) it shall make investments [14][*
* *] as enumerated below:
(i) at least [15][66.67%]
of the investible funds shall be invested in unlisted
equity shares or equity linked instruments [16][of
Venture Capital Undertaking];
(ii) not more than [17][33.33%]
of the investible funds may be invested by way of:
(a) subscription to initial public offer of a venture capital
undertaking whose shares are proposed to be listed [18][*
* *];
(b) debt or debt instrument of a venture capital undertaking in which
the [19][foreign
venture capital investor] has already made an investment by way of equity;
[20][(c) preferential allotment of equity shares of a listed company
subject to lock in period of one year.
Explanation 1.─For the purposes of these
regulations, a financially weak company” means a company, which has at the end
of the previous financial year accumulated losses, which has resulted in
erosion of more than 50% but less than 100% of its networth as at the beginning
of the previous financial year;
(d)
it shall disclose the duration of life cycle of the fund;
(e)
special purpose vehicles which are created for the purpose of
facilitating or promoting investment in accordance with these Regulations.
Explanation.─The
investment conditions and restrictions stipulated in clause (c) of regulation
11 shall be achieved by the Foreign Venture Capital Investor by the end of its
life cycle.]
CHAPTER
IV
GENERAL
OBLIGATIONS
Maintenance of books and
records.
12. (1) Every Foreign Venture
Capital Investor shall maintain for a period of eight years, books of accounts,
records and documents which shall give a true and fair picture of the state of
affairs of the Foreign Venture Capital Investor.
(2) Every Foreign Venture Capital Investor shall intimate to the Board,
in writing, the place where the books, records and documents referred to in
sub-regulation (1) are being maintained.
Power to call for
information.
13. (1) The Board may at any
time call for any information from a Foreign Venture Capital Investor with
respect to any matter relating to its activity as a Foreign Venture Capital
Investor.
(2) Where any information is called for under sub-regulation (1) it shall
be furnished within the time specified by the Board.
General Obligations and
Responsibilities.
14. (1) Foreign Venture Capital
Investor or a global custodian acting on behalf of the foreign venture capital
investor shall enter into an agreement with the domestic custodian to act as a
custodian of securities for Foreign Venture Capital Investor.
(2) Foreign Venture Capital Investor shall ensure that domestic custodian
takes steps for,-
(a) monitoring of investment
of Foreign Venture Capital Investors in
(b) furnishing of periodic
reports to the Board
(c) furnishing such
information as may be called for by the Board.
Appointment of
designated bank.
15. Foreign Venture Capital
Investor shall appoint a branch of a bank approved by Reserve Bank of
CHAPTER
V
INSPECTION
Board's right to inspect
or investigate.
16. The Board may, suo-moto or upon receipt of information or complaint, cause
an inspection or investigation to be made in respect of conduct and affairs of
any foreign venture capital investor by an Officer whom the Board considers fit
for any of the following reasons namely:-
(a) to ensure that the books of account, records and documents are being
maintained by the foreign venture capital investor in the manner specified in
these regulations.
(b) to inspect or investigate into complaints received from
investors, clients or any other person, on any matter having a bearing on the
activities of the foreign venture capital investor;
(c) to ascertain whether the provisions of the Act and these regulations
are being complied with by the foreign venture capital investor; and
(d) to inspect or investigate suo-moto
into the affairs of a foreign venture capital investor in the interest of the
securities market or in the interest of investors.
Obligation of Foreign
Venture Capital Investor on investigation or inspection by Board.
17. (1) It shall be the duty of
every Foreign Venture Capital Investor in respect of whom an inspection or
investigation has been ordered under regulation 16 and any other person
associated who is in possession of relevant information pertaining to conduct
and affairs of such Foreign Venture Capital Investor including asset management
company or fund manager, to produce to the Inspecting or Investigating Officer
such books, accounts and other documents in his custody or control and furnish
him with such statements and information as the said Officer may require for
the purposes of the inspection or investigation.
(2) It shall be the duty of Foreign Venture Capital Investor and any
other person associated who is in possession of relevant information pertaining
to conduct and affairs of the Foreign Venture Capital Investor to give to the
Inspecting or Investigating Officer all such assistance and shall extend all
such co-operation as may be required in connection with the inspections or
investigations and shall furnish such information sought by the Inspecting or
Investigating Officer in connection with the inspections or investigations.
(3) The Inspecting or Investigating Officer shall, for the purposes of
inspection or investigation, have power to examine on oath and record the
statement of any person responsible for or connected with activities of Foreign
Venture Capital Investor or any other person associated having relevant
information pertaining to such Foreign Venture Capital Investor.
(4) The Inspecting or Investigating Officer shall, for the purposes of
inspection or investigation, have power to get authenticated copies of
documents, books, accounts of Foreign Venture Capital Investor, from any person
having control or custody of such documents, books or accounts.
Submission of the Report.
18. The Inspecting or
Investigating Officer shall on completion of inspection or investigations,
submit a report to the Board.
Board's right to issue
any direction to Foreign Venture Capital Investor.
19. The Board may after
consideration of the inspection or investigation report and after giving a
reasonable opportunity of hearing to the Foreign Venture Capital Investor,
require it to take such measure or issue such directions as it deems fit in the
interest of capital market and investors, including directions in the nature
of: -
(a) requiring the person concerned to dispose of the securities or
disinvest in a manner as may be specified in the directions;
(b) requiring the person concerned not to further invest for a
particular period;
(c) prohibiting the person concerned from operating in the capital
market in
CHAPTER
VI
PROCEDURE
FOR ACTION IN CASE OF DEFAULT
Board's right to suspend
or cancel certificate of registration.
20. Without prejudice to the
appropriate directions or measures under regulation 19, it may after
consideration of the investigation report, initiate action for suspension or
cancellation of the registration of such Foreign Venture Capital Investor:
Provided that no such certificate of registration
shall be suspended or cancelled unless the procedure specified in regulation 23
is complied with.
Suspension of
certificate.
21. The Board may suspend the
certificate where the Foreign Venture Capital Investor:
(a) contravenes any of the provisions of the Act or these regulations;
(b) fails to furnish any information relating to its activity
as a Foreign Venture Capital Investor as required by the Board;
(c) furnishes to the Board information which is false or misleading in
any material particular;
(d) does not submit periodic returns or reports as required by
the Board;
(e) does not co-operate in any enquiry or inspection conducted
by the Board;
Cancellation of
certificate.
22. The Board may cancel the
certificate granted to a Foreign Venture Capital Investor: -
(a) when the Foreign Venture
Capital Investor is guilty of fraud or has been convicted of an offence
involving moral turpitude;
Explanation.─The expression "fraud" has the same meaning
as is assigned to it in section 17 of the Indian Contract Act, 1872. (9 of
1872);
(b) the Foreign Venture
Capital Investor has been guilty of repeated defaults of the nature mentioned
in the regulation 21; or
(c) Foreign Venture Capital
Investor does not continue to meet the eligibility criteria laid down in these
regulations;
(d) contravenes any of the
provisions of the Act or these regulations.
Manner of making order
of cancellation or suspension.
23. No order of penalty or
cancellation of certificate shall be imposed on the Foreign Venture Capital
Investor except after holding an enquiry in accordance with the procedure
specified in [21][Chapter
V of the Securities and Exchange Board of India (Intermediaries) Regulations,
2008].
24 to 27. [22][*
* *]
Action against
intermediary.
28. The Board may initiate
action for suspension or cancellation of registration of an intermediary
holding a certificate of registration under section 12 of the Act who fails to
exercise due diligence in the performance of its functions or fails to comply
with its obligations under these regulations:
Provided that no such certificate of registration
shall be suspended or cancelled unless the procedure specified in the
regulations applicable to such intermediary is complied with.
Appeal to [23][Securities Appellate
Tribunal].
29. Any person aggrieved by an
order of the Board under these regulations may prefer an appeal to the
Securities Appellate Tribunal in accordance with section 15T of the Act.
FIRST
SCHEDULE
FORMS
SECURITIES
(FOREIGN
VENTURE CAPITAL INVESTORS) REGULATIONS, 2000
[See Regulation 3]
APPLICATION
SECURITIES
Mittal Court `B' Wing, 1st Floor
Nariman Point,
1. Name, address, telephone
no., telex no. and fax no. of the applicant. In case the applicant has a
representative office in
2. Please indicate whether the
applicant belongs to any one or more of the following categories:
Pension Fund, Mutual Fund, Investment Trust, Investment company, Investment
trust, Investment partnership, Asset Management Company, Investment manager,
Investment Management Company, Endowment fund, University fund, Charitable
institutions or any other investment vehicle incorporated and established
outside India
3. (a) The date and place of
incorporation of the applicant. (Details of statute under which incorporated).
(b) Brief description of the principal activities of the applicant and
the year of commencement of such activities.
(c) Brief description of the group, if any, to which the applicant
belongs.
4. Whether any of the
following documents are submitted?
i. Copy of certificate of
registration with home regulator; or
ii. Copy of income tax return filed in the home
country; or
iii. Copy of bankers certificate fair track record
of the applicant
5. Please also state whether
there has been any instance of violation or non-adherence to the securities
laws, code of ethics/conduct, code of business rules, for which the applicant,
or its parent/ holding company or affiliate may have been subjected to
economic, or criminal liability or suspended from carrying out its operations,
or the registration has been revoked, temporarily or permanently. If no, submit
an undertaking.
6. Please indicate the names
of the clients on whose behalf you propose to invest in
7. Please indicate the manner
in which you propose to conduct your investments in
8. Name and address of the
designated bank branch in
9. a) Name, address, telephone
no., telex no., and fax no. of the domestic custodian. Please also present the
background information on the custodian, including volume of business handled, organisational infrastructure and the number of investment
companies for which the domestic custodian is acting, or has acted, as
custodian.
b) Particulars of the agreement entered into with the domestic custodian.
We hereby agree and declare that the information supplied in the
application, including the attachment sheets, is complete and true.
We further agree that we shall comply with the provisions of the Act, and
regulations issued thereunder and all other relevant
laws.
We further agree that as a condition of grant of certificate of
registration, we shall abide by such operational instructions/ directives as
may be issued by Securities and Exchange Board of India under the provisions of
the Act from time to time.
For and on behalf of_______________________________________
(Name of the applicant)
Authorised Signatory ___________________ ___________________
(Name)
(Signature)
Date:
Place:
Note:
1. Securities and Exchange Board of India (SEBI) reserves the right to
call for any further information from the applicant regarding his application.
2. Applications, superscribed "Application
for Registration of Foreign Venture Capital Investors ", should be
submitted in duplicate, in sealed envelopes, at Securities and Exchange Board
of India's office.
Documents to be enclosed with the application:
a. Documents to support registration or regulation by a Securities
Commission and/or Self Regulatory Organisation, or
any other appropriate regulatory/registering authority or
b. Copy of income tax return filed in the home country; or
c. Copy of bankers certificate for fair track record of the applicant
SECURITIES
(FOREIGN
VENTURE CAPITAL INVESTORS) REGULATIONS, 2000
[See Regulation 7(3)]
Certificate
of Registration as Foreign Venture
Capital
Investor
I. In
exercise of the powers conferred by sub-section (1) of section 12 of the
Securities and Exchange Board of India Act, 1992, (15 of 1992) read with the
regulations made thereunder the Board hereby grants a
certificate of registration to
------------------------------------------------------------------------ as a
Foreign Venture Capital Investor subject to the conditions specified in the Act
and in the regulations made thereunder.
II. The Registration Number of the foreign venture capital [24][investor]
is IN/FVCI/ /
Date:
Place: MUMBAI
By order
Sd/-
For and on
behalf of
SECURITIES
SECOND
SCHEDULE
SECURITIES
(FOREIGN
VENTURE CAPITAL INVESTOR) REGULATIONS, 2000
[See Regulations 3 and 7(2)]
FEES
[25][PART A
Amount
to be paid as fees
Application fee (US$)
2,500
Registration fee (US
$) 10,000]
PART B
I. The fees specified above shall be payable by bank draft in favour of "The Securities and Exchange Board of
India" payable at Mumbai.
THIRD
SCHEDULE
SECURITIES
(FOREIGN
VENTURE CAPITAL INVESTOR) REGULATIONS, 2000
[See
Regulation 2 (j)]
NEGATIVE
LIST
1. [26][*
* *]
2. Non-banking financial services 29 [27][excluding
those Non – Banking Financial companies which are registered with Reserve Bank
of India and have been categorized as Equipment Leasing or Hire Purchase
companies.
3. Gold financing 30 [28][excluding
those companies which are engaged in gold financing for jewellery].
4. Activities not permitted under the Industrial Policy of Government
of India.
5. Any other activity which may be specified by the Board in
consultation with the Government of India from time to time.
[1] Clauses
(e) and (ee) substituted for clause (e) by the SEBI
(Foreign Venture Capital Investors) (Amendment) Regulations, 2001, w.e.f.
[2] Omitted
by the SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2004,
w.e.f.
‘(e) “enquiry or
investigating officer" means an enquiry or investigating officer appointed
by the Board, under regulation 16.’
[3] Inserted
by the SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2004,
w.e.f.
[4] Substituted,
ibid. Prior to its substitution, it
read as under:
‘(g) ”Foreign
venture capital Investor” means an investor incorporated, established outside
India, which proposes to make investment in venture capital fund(s) or venture
capital undertakings in India and is registered under these Regulations.’
[5] The
words ”In venture capital undertaking” omitted by the SEBI (Foreign Venture
Capital Investors) (Amendment) Regulations, 2004, w.e.f.
[6] Word
"or" omitted by the SEBI (Foreign Venture Capital Investors)
(Amendment) Regulations, 2001, w.e.f.
[7] Word
"or" omitted, ibid.
[8] Word
"or" omitted, ibid.
[9] Substituted
by the (Intermediaries) Regulations, 2008, w.e.f.
“4A. Applicability
of the Securities and Exchange Board of India (Criteria for Fit and Proper
Person) Regulations, 2004.─The provisions of the Securities and Exchange
Board of India (Criteria for fit and proper person) Regulations, 2004 shall, as
for as may be, apply to all applicants or the foreign venture capital investors
under these regulations.”
[10] Substituted
for "fund" by the SEBI (Foreign Venture Capital Investors)
(Amendment) Regulations, 2001, w.e.f.
[11] The
word “while” omitted by the SEBI (Foreign Venture capital Investors) (Amendment)
Regulations, 2004, w.e.f.
[12] Substituted
for “Venture capital fund” by the SEBI (Foreign Venture Capital Investors)
(Amendment) Regulations, 2001, w.e.f.
[13] Words
“it shall however not invest more than 25% of the funds committed for
investments to
[14] Words
“in the Venture Capital Undertaking” omitted, ibid.
[15] Substituted
for “75%”, ibid.
[16] Inserted,
ibid.
[17] Substituted
for “25%”, ibid.
[18] Words
“subject to lock-in period of one year” omitted, ibid.
[19] Substituted
for “Venture capital fund” by the SEBI (Foreign Venture Capital Investors)
(Amendment) Regulations, 2001, w.e.f.
[20] Inserted, ibid.
[21] Substituted
for the Securities and Exchange Board of India (Procedure for Holding Enquiry
by Enquiry Officer and Imposing Penalty) Regulations, 2002” by the SEBI
(Intermediaries) Regulations, 2008, w.e.f. 26-5-2008. Earlier it was amended by
the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing
Penalty) Regulations, 2002, w.e.f.
[22] Regulations
24 to 27 omitted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer
and Imposing Penalty) Regulations, 2002, w.e.f. 27-9-2002. Prior to its
omission, it read as under:
“24. Manner of holding enquiry before suspension
or cancellation.─(1) For the purpose of holding an enquiry under
regulation 23, the Board may appoint one or more enquiry officers.
(2) The enquiry officer shall issue to the
Foreign Venture Capital Investors, at its registered office or its principal
place of business or its agent or representative in India, a notice setting out
the grounds on which action is proposed to be taken against it and calling upon
it to show cause against such action within a period of fourteen days from the
date of receipt of the notice.
(3) The Foreign Venture Capital Investor
may, within fourteen days from the date of receipt of such notice, furnish to
the enquiry officer a written reply, together with copies of documentary or
other evidence relied on by it or sought by the Board from the Foreign Venture
Capital Investor.
(4) The enquiry officer shall give a
reasonable opportunity of hearing to the Foreign Venture Capital Investor to
enable him to make submissions in support of its reply made under
sub-regulation (3).
(5) Before the enquiry officer, the
Foreign Venture Capital Investor may appear through any person duly authorised
by the Foreign Venture Capital Investor:
Provided that no
lawyer or advocate shall be permitted to represent the Foreign Venture Capital
Investors at the enquiry:
Provided further
that where a lawyer or an advocate has been appointed by the Board as a
presenting officer under sub-regulation (6), it shall be lawful for the Foreign
Venture Capital Investor to present its case through a lawyer or advocate.
(6) The enquiry officer may, if he
considers it necessary, ask the Board to appoint a presenting officer to
present its case.
(7) The enquiry officer shall, after
taking into account all relevant facts and submissions made by the Foreign
Venture Capital Investor, submit a report to the Board and recommend the penal
action, if any, to be taken against the Foreign Venture Capital Investor as
also the grounds on which the proposed action is justified.
25. Show-cause notice and order.─(1)
On receipt of the report from the enquiry officer, the Board shall consider the
same and may issue to the Foreign Venture Capital Investor a show-cause notice
as to why the penal action as proposed by the enquiry officer or such
appropriate action should not be taken against it.
(2) The Foreign Venture Capital Investor
shall, within fourteen days of the date of the receipt of the show-cause
notice, send a reply to the Board.
(3) The Board, after considering the
reply, if any, of the Foreign Venture Capital Investor, shall, as soon as
possible pass such order as it deems fit.
26. Effect of suspension and cancellation of
certificate.─(1) On and from the date of the suspension of the
certificate, the Foreign Venture Capital Investor shall cease to carry on any
activity as a Foreign Venture Capital Investor during the period of suspension,
and shall be subject to such directions of the Board with regard to any
records, documents or securities that may be in its custody or control,
relating to its activities as Foreign Venture Capital Investor, as the Board
may specify.
(2) On and from the date of cancellation
of the certificate, the Foreign Venture Capital Investor shall, with immediate
effect, cease to carry on any activity as a Foreign Venture Capital Investor,
and shall be subject to such directions of the Board with regard to the
transfer of records, documents or securities that may be in its custody or
control, relating to its activities as Foreign Venture Capital Investor, as the
Board may specify.
27. Publication of order of suspension or cancellation.─The
order of suspension or cancellation of certificate passed under regulation 25
may be published by the Board in two newspapers.”
[23] Substituted
for “Securities and Exchange Board of India” by the SEBI (Foreign Venture
Capital Investors) (Amendment) Regulations, 2001, w.e.f.
[24] Substituted
for “fund” by the SEBI (Foreign Venture Capital Investors) (Amendment)
Regulations, 2001, w.e.f.
[25] Substituted
by the SEBI (Payment of Fees) (Amendment) Regulations, 2009, w.e.f.
____________________________________________________________________________
Application fee (US$) 5, 000/-
Registration fee payable at the time of
registration
for grant of certificate (US$)
20, 00, 000/-
____________________________________________________________________________
[26] Words
“Real Estate” omitted by the SEBI (Foreign Venture Capital Investors)
(Amendment) Regulations, 2004, w.e.f.
[27] Inserted,
ibid.
[28] Inserted
by the SEBI (Foreign Venture Capital Investors) (Amendment) Regulations, 2004,
w.e.f.