As per the Sebi regulations, no FPI can issue, subscribe to or otherwise deal in ODIs, directly or indirectly, unless they satisfy certain strict conditions. The Category III FPIs, which mostly include hedge funds and individual investors, cannot issue, subscribe to or otherwise deal in ODIs, directly or indirectly. However, Sebi has tightened norms substantially over the years about who can issue and who can subscribe to these instruments, amid long-standing concerns about their possible misuse for money laundering. All these conditions would now also apply for transfer of the ODIs. The regulator decided on the latest tightening of norms earlier this year after recommendations in this regard were made by the Supreme Court- appointed special investigation team on black money.

Source: Mint July 13, 2016 17:37 UTC