Sebi proposes relaxed entry norms for FPIs

Sebi proposes relaxed entry norms for FPIs

Sebi proposes relaxed entry norms for FPIs

Regulator Sebi on Wednesday proposed relaxed entry norms for foreign portfolio investors (FPIs) willing to invest directly in Indian markets rather than through participatory notes.

It has proposed to ease some rules, including expanding the eligible jurisdictions for registration by including countries with diplomatic tie-ups with India.

Besides, the regulator has suggested for rationalising “fit and proper” criteria for FPIs as well as simplifying broad based requirements for such investors.

Further, it has proposed FPIs, operating under the Multiple Investment Managers (MIM) structure and holding foreign venture capital investors (FVCI) registration, to appoint multiple custodians.

The Securities and Exchange Board of India (Sebi) has sought comments from public till July 27 and a final regulation will be out in place after taking into views of all the stakeholders.

The move comes after the Sebi board last week approved proposals to float a discussion paper on easing registration of FPIs.

“It is proposed that the list of eligible jurisdictions in terms of FPI Regulations for grant of registration to Category I FPIs, may be expanded by also considering those jurisdictions, wherein Government of India has diplomatic tie-up and FEMA compliant jurisdiction,” Sebi said.

Consequently, more jurisdictions such as other provinces in Canada would be able to access the market due to change in FPI Regulations.

The regulator has proposed that Category I and II FPIs, which are essentially government and regulated entities, should not need any additional documentation and procedural requirements. However, Category III FPIs should continue to be subject to such requirements.