RBI, on August 22, 2022, had issued the Foreign Exchange Management (Overseas Investment) Directions, 2022 (‘FEMA OI Directions’). As per the provisions of Paragraphs 1(ix)(e) and 24(1) of the FEMA OI Directions, any investment (including sponsor contributions) in units of any overseas investment fund, which is regulated by the financial sector regulator in the host jurisdiction, will be treated as Overseas Portfolio Investment (‘OPI’). Further, as per the provisions of Paragraph 1(ix)(e) and Paragraph 24(1) of FEMA OI Directions, investments can be made in ‘units’ of investment funds. In light of the extant regulatory regime governing investment funds across jurisdictions and in an attempt to provide more clarity, the RBI has, by way of its Notification dated June 7, 2024, expanded/included clarificatory language in Paragraph 1(ix)(e) and Paragraph 24(1) of the FEMA OI Directions to extend such investments to not just ‘units’ but to any other instruments, by whatever name called, issued by the relevant investment fund. It has also clarified that ‘investment fund overseas, duly regulated’ for the purpose of Paragraph 1(ix)(e) will also include funds whose activities are regulated by financial sector regulator of host country or jurisdiction through a fund manager.