3. Policy for foreign investment in Commodity Exchanges:
3.1 Foreign investment will be allowed through a composite ceiling i.e. Foreign Direct Investment (FDI) under the FDI Scheme incorporated as Schedule 1 under regulation 5 (1) of the Foreign Exchange Management (Transfer or Issue of Security By a Person Resident Outside India) Regulations, 2000 (FEMA Regulations) + investment by registered Foreign Institutional Investors (FII) under the Portfolio Investment Scheme incorporated as Schedule 2 under Regulation 5(2) of the FEMA Regulations, is allowed up to 49%.
3.2 FDI will be allowed with specific prior approval of the Government.
3.3 Investment by registered FII under the Portfolio Investment Scheme will be limited to 23% and investment under the FDI Scheme will be limited to 26%.
3.4 FII purchases shall be restricted to secondary market only.
3.5 No foreign investor/ entity, including persons acting in concert, will hold more than 5% of the equity in these companies.
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