The Securities and Exchange Board of India (SEBI) onWednesday notified the new Foreign Portfolio Investor (FPI) regulations to put in place an easier registration process and operating framework for overseas entities seeking to invest in Indian capital markets.
The new regulations, effective this day, replaces the existing Sebi regulations for Foreign Institutional Investors (FIIs) and the new class of investors, FPIs, would encompass all FIIs, their sub-accounts and Qualified Foreign Investors (QFIs).
Under the new norms, FPIs have been divided into three categories as per their risk profile and the KYC (Know Your Client) requirements and other registration procedures would be much simpler for FPIs compared to current practices.
Sebi also decided to grant them permanent registration, as against the current practice of granting approvals for one year or five years to overseas entities seeking to invest in Indian markets. They will be permanent unless suspended or cancelled by the Board or surrendered by the FPI.
Simultaneously, Sebi said that FPIs would need to apply for registration through Designated Depository Participants (DDPs), subject to KYC compliance.
“The designated depository participant shall endeavor to dispose of the application for grant of certificate of registration as soon as possible but not later than 30 days after receipt of application by the designated depository participant,” Sebi said.
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