Sebi frames norms to ease foreign portfolio flows

The KYC (Know Your Client) requirements and other registration procedures would be much simpler for FPIs compared to current practices.

Written by ENS Economic Bureau | Mumbai | Published:October 6, 2013 1:16 am

Market regulator Securities and Exchange Board of India (Sebi) on Saturday announced new foreign portfolio investor (FPI) regulations to put in place easier registration process and operating framework for such entities.

The new class of investors,FPIs,would encompass all FIIs (foreign institutional investors),their sub-accounts and qualified foreign investors (QFIs),and would be divided into three categories as per their risk profile.

The KYC (Know Your Client) requirements and other registration procedures would be much simpler for FPIs compared to current practices.

Sebi has also decided to grant them a permanent registration,as against the current practice of granting approvals for one year or five years to the overseas entities seeking to invest in Indian markets.

At a meeting held here the Sebi board approved the new Sebi (Foreign Portfolio Investors) Regulations,2013 to bring about these wide-ranging changes.

Sebi said in a statement after the board meeting that the new regulations have been framed keeping in view the provisions of existing norms for FIIs and QFIs,as also the recommendations made by a ‘Committee on Rationalisation of Investment Routes and Monitoring of Foreign Portfolio Investments’ chaired by former Cabinet Secretary KM Chandrasekhar.

Sebi also approved setting up ‘Designated Depository Participants’ or DDPs,that would register FPIs on behalf of the market regulator subject to compliance with KYC norms.

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