RBI Issues Guidelines on FIRMS Portal Reporting for Issuance of Partly Paid Units by Investment Vehicles [Read Circular]
RBI issues guidelines mandating timely reporting of partly paid units issued to foreign investors by investment vehicles via the FIRMS portal.
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The Reserve Bank of India (RBI), through its notification dated May 23, 2025 (A.P. (DIR Series) Circular No. 06), issued important guidelines for reporting the issuance of partly paid units by investment vehicles to foreign investors. These directions are intended to streamline compliance and enhance the regulatory framework for foreign investments in India. Background The circular...
The Reserve Bank of India (RBI), through its notification dated May 23, 2025 (A.P. (DIR Series) Circular No. 06), issued important guidelines for reporting the issuance of partly paid units by investment vehicles to foreign investors. These directions are intended to streamline compliance and enhance the regulatory framework for foreign investments in India.
Background
The circular draws attention to amendments made to the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, particularly through the Second Amendment Rules of 2024. These changes enable investment vehicles in India (such as Alternative Investment Funds, Real Estate Investment Trusts, and Infrastructure Investment Trusts) to issue partly paid units to persons resident outside India.
The circular also refers to the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019, which govern the procedural aspects of foreign investments, including timelines for reporting.
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Key Provisions
1. Reporting Obligation via Form InVI: Investment vehicles that issue units to foreign investors are required to submit Form InVI on the FIRMS (Foreign Investment Reporting and Management System) portal. This must be done within 30 days from the date of issuance of the units.
2. Special Provision for Past Issuances: For partly paid units issued before May 23, 2025, investment vehicles are granted a grace period of 180 days from the date of the circular to complete the required reporting. Notably, no late submission fees will apply if the reporting is completed within this window.
3. Future Issuances: Any issuance of partly paid units made on or after May 23, 2025, must be reported within the standard 30-day timeframe, as per the existing regulations.
4. Immediate Implementation: These directions are effective immediately. RBI has advised all Category-I Authorised Dealer (AD) banks to inform their clients and stakeholders to ensure timely compliance.
The instructions have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (FEMA). They are in addition to any other approvals or permissions required under applicable laws.
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Implications
These guidelines are an important step in enhancing transparency and regulatory oversight of foreign investment flows into Indian investment vehicles. By allowing a one-time relaxation for past transactions and reaffirming the reporting requirements for future transactions, the RBI aims to ensure smooth and timely compliance through the FIRMS portal.
To Read the full text of the Circular CLICK HERE
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