REVIEW OF SEBI (FOREIGN PORTFOLIO INVESTORS) REGULATIONS

Aug. 22, 2019

The Securities and Exchange Board of India (SEBI) has simplified the compliance requirements for foreign portfolio investors (FPIs), to make the regulatory framework more investor friendly.

Key aspects of revised regulations include:

To simplify the registration process and to bring about ease in compliance requirements for FPIs, the broad based eligibility criteria for institutional foreign investors has been done away with.
On reviewing the risk profiling of the FPIs, it is decided that the FPIs may be re-categorized into two categories, instead of the present requirement of three categories.
Registration for multiple investment manager (MIM) structures has been simplified.
Considering that the central banks are relatively long term, low risk investors directly/ indirectly managed by the Government, the central banks that are not the members of BIS (Bank for International Settlement) shall also be eligible for FPI registration.
The entities established in the international financial services center (IFSC) be deemed to have met the jurisdiction criteria for FPIs.
FPIs shall be permitted for off-market transfer of securities which are unlisted, suspended or illiquid, to a domestic or foreign investor.
Offshore funds floated by Indian Mutual Funds shall now be permitted to invest in India after obtaining registration as FPI.
The requirements for issuance and subscription of Offshore Derivative Instruments (ODIs) have been rationalized.