The Reserve Bank of India has operationalised many big-bang measures, announced by Finance Minister Jaswant Singh in January this year, to bring about further flexibility in capital account transactions and help integrate Indian financial markets with global capital markets.

These measures related to direct investments in the equity of overseas companies listed in recognised stock exchanges abroad.

Sources said a listed company could, from May 14, invest in the shares of an overseas company that is listed on a recognised stock exchange and has a shareholding in its name of not less than 10 per cent in any listed Indian company as on January 1 of the year of investment.

The only condition in case of investment by a listed Indian company is that the investment should not exceed 25 per cent of its net worth shown in its latest audited balance sheet.

With RBI amending the Foreign Exchange Management Act regulations on 'transfer or issue of any foreign security', a resident individual too can -- effective May 14 -- invest in the equity of any company listed in overseas stock exchanges so long as the listed overseas entity has a shareholding in its tame of not less than 10 per cent in any listed company as on January 1 of the year of investment.

No specific limits have been specified in the case of individuals, even though all transactions relating to purchase and sale of shares of the overseas company should be routed through the designated branch of an authorised dealer in India.

Further, all mutual funds registered in India can make direct investments in the equity of a company listed in overseas stock exchanges if such an overseas company has a shareholding in its name of 'not less than 10 per cent' in any listed Indian company as on January 1 of the year of investment.