Only an Indian company engaged in financial services sector activities can make investment in a JV/WOS abroad in the financial services sector, provided it fulfills the following additional conditions:
has earned net profit during the preceding three financial years from the financial services activities;
is registered with the appropriate regulatory authority in India for conducting financial services activities;
iii. has obtained approval for undertaking such activities from the regulatory authorities concerned both in India and abroad before venturing into such financial activity;
has fulfilled the prudential norms relating to capital adequacy as prescribed by the regulatory authority concerned in India; and
Any additional investment by an existing JV / WOS or its step down subsidiary in the financial services sector is also required to comply with the above conditions.
b) Can an Indian company in the financial services sector make investment in a JV/WOS abroad in the non-financial services sector?
Regulated entities engaged in financial services sector activities in India making investment in non-financial services activities overseas are also required to comply with the additional conditions mentioned above.
c) Can an Indian company set up JV / WOS for trading in Overseas Commodities Exchanges?
Trading in Commodities Exchanges overseas and setting up of JV / WOS for trading in Overseas Commodities Exchanges will be reckoned as financial services activity and will require clearance from Securities and Exchange Board of India (SEBI) on account of merger of Forward Markets Commission with SEBI.
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