SC: CIRP Need Not Be Set Aside Solely for Fraudulent Filing of Section 9 Plea  ||  Supreme Court: Compromise Decree Passed Without Impleading Necessary Party is Void  ||  SC: Cheque Dishonour Notice Valid if Sent to Drawer’s Address and Received by Family  ||  J&K&L HC: Minority During Attestation Cannot Justify Decades-Long Delay in Challenging Mutation  ||  Bombay HC: WhatsApp Circulation of Objectionable Photos Can Attract SC/ST Act  ||  J&K&L HC: Cardiac Arrest From Stress of Long-Distance Driving is Compensable  ||  Delhi HC: Accused Cannot Delay Trial and Then Rely on Delay to Seek Bail  ||  Calcutta HC: Insurer Must Compensate Child’s Accidental Death Despite Driver’s Fake Licence  ||  Bombay HC Tells X to Take Down Defamatory Post Targeting Serum Institute, CEO Adar Poonawalla  ||  Delhi High Court Restores Arbitral Award in DMRC’s Favour Passed by Employee-Arbitrator    

Pricing in case of Put or Call options in JV Agreements- (Insurance Regulatory and Development Authority) (05 Jul 2017)

MANU/IRDA/0025/2017

Insurance

The Reserve Bank of India had, vide amendment Notification No. FEMA 294/2013-RB dated 12th November, 2013, permitted the optionality clause (put and call options) in contracts. In this context some insurers had approached the Authority seeking clarification as to whether the existing contracts with optionality clauses, entered prior to the notification of the above amendment were in compliance with the FEMA stipulations.

The Government of India, in consultation with the Reserve Bank of India, has clarified that any Agreement with "options" entered into prior to 12th November, 2013 is in contravention of Regulation 2(ii) of the Foreign Exchange Management (transfer or Issue of Securities by a person Resident outside India) regulations, 2000. It has also been reiterated that all existing contracts should be in compliance with the pricing guidelines issued by the RBI under the FEMA Regulations.

In view of the above, all insurers who have Joint Venture Agreements with foreign entities should examine whether they have option clauses therein and ensure that they are in compliance with the FEMA Regulations, including those regarding pricing. Insurers are advised to furnish a confirmation of compliance with the above, to the Authority.

Tags : JV AGREEMENTS   OPTIONS   PRICING  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved