Single Master Form (SMF)
RBI via its ‘Statement on Developmental and Regulatory Policies’ dated April 5th, 2018 announced its plan to introduce an online reporting system for foreign investments by June 30th, 2018 via a Single Master Form (SMF) which would subsume most reporting requirements, irrespective of the instrument through which the foreign investment is made. Subsequently, in light of this policy announcement, RBI issued a circular on June 7th, 2018 giving stakeholders a first glimpse of the draft SMF.
Salient features of the SMF
- Online filing
- Subsumes 8 of the existing 12 forms into one single master form:
- The format of the SMF can be divided into three parts. Whilst the first and third part are common for all reporting, the second part (consisting of forms) would vary depending upon the mode of investment.
- The third part of the SMF contains certain requirements such as certificate from a company secretary (only required for Form FC-GPR currently), declaration by a non-resident transferor/transferee (only required for Form FC-TRS currently) etc. which have now been made common to all reporting.
- The format SMF also provides for an additional reporting of investment by a non-resident in an investment vehicle in Form InVi, which is currently not required under FEMA 20.
Whilst the draft format of SMF has been released, it may be subject to further revision. The final form will be available on the RBI website in the RBI Master Direction on Reporting under FEMA shortly.
It is important to note that SMF is not a one stop form, and subsumes only 8 out of the existing 12 forms prescribed under FEMA 20. Indian entities will still need to separately file certain other forms such as ARF, FLA, Form LEC (FII) and Form LEC (NRI), irrespective of SMF coming into effect.
Entity Master Form (EMF)
Prior to implementation of SMF, the RBI would provide an interface to all Indian entities (companies, LLPs and start-ups) which have foreign investment in them, to provide data in respect of the total foreign investment they have received in a specified format. The interface will be available on RBI website from June 28th, 2018 to July 12th, 2018.
All Indian entities which do not comply with this pre-requisite will not be permitted to receive any foreign investment (including indirect foreign investment) going forward and will be declared non-compliant with FEMA.
Given the tight timeline within which the disclosure needs to be uploaded, RBI has released a format of the Entity Master Form (EMF) so as to enable Indian entities to keep all information ready in the interim. Other than the above, RBI has provided no further details on the EMF yet.
The EMF is in essence a diligence check being undertaken by the RBI on all Indian entities which have any form of foreign investment to ascertain whether they have complied with reporting requirements under FEMA till date.
RBI has initiated the EMF with the intent to consolidate all historical data of all form of foreign investment in all Indian entities in one single form (the EMF) and on one single platform (online).
RBI Compliance Group
Ozg Compliance & Regulatory Practice Center
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