Ministry of Finance 

16.10.2019

Commercial

Determination of specified instruments as debt instruments

MANU/EAFF/0067/2019

In exercise of the powers conferred by sub-section (7) of section 6 of the Foreign Exchange Management Act, 1999 (42 of 1999), the Central Government hereby determines the following instruments as debt instruments, namely:-

(i) Government bonds;

(ii) corporate bonds;

(iii) all tranches of securitisation structure which are not equity tranche;

(iv) borrowings by Indian firms through loans;

(v) depository receipts whose underlying securities are debt securities.

2. Instruments specified below shall be considered as non-debt instruments, namely:-

(i) all investments in equity in incorporated entities (public, private, listed and unlisted);

(ii) capital participation in Limited Liability Partnerships (LLPs);

(iii) all instruments of investment as recognised in the FDI policy as notified from time to time;

(iv) investment in units of Alternative Investment Funds (AIFs) and Real Estate Investment Trust (REITs) and Infrastructure Investment Trusts (InVITs);

(v) investment in units of mutual funds and Exchange-Traded Fund (ETFs) which invest more than fifty per cent in equity;

(vi) the junior-most layer (i.e. equity tranche) of securitisation structure;

(vii) acquisition, sale or dealing directly in immovable property;

(viii) contribution to trusts;

(ix) depository receipts issued against equity instruments.

3. All other instruments which are not specified in paragraphs (1) and (2) above, shall be deemed as debt instruments.

Tags : Determination Debt instruments Non-debt instruments

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