Sebi eases rules for FIIs registration

The market regulator has offered more sops to foreign investors. In a bid to attract more portfolio inflows into India, the Sebi has decided...

The market regulator has offered more sops to foreign investors. In a bid to attract more portfolio inflows into India, the Sebi has decided to cut the registration time and fee for foreign institutional investors FIIs.

8220;We have simplified procedures for registration of FIIs. Secondly, what we have done is to bring down the time lag for registration,8221; Sebi chairman G. N. Bajpai told Reuters. 8220;Earlier it used to be three to four weeks. Now it is 14 days,8221; Bajpai said.

Sebi also reduced the registration fees for FIIs to 5,000 from 10,000. Asked when the changes come into effect, Bajpai said: 8220;Immediately.8221;

FII investments in Indian capital market have now crossed more than 15.17 billion. Indian stock market with a market capitalisation of over 135 billion around Rs 653,392 crore has been a major attraction for investors all over the world, thanks to the new economy boom and excellent functioning of Stock Exchanges in the country.

Foreign companies/individuals are permitted to invest in equity shares traded in Indian stock markets if they are registered as a FII or if they have a sub account in India. Foreign Investors whether registered as a FII or not can also invest in Indian securities outside the FII route.

Such investments require case-by-case approval from the Foreign Investment Promotion Board in the Ministry of Industry and RBI, or only by the RBI depending on the size of the investment and the industry in which this investment is to be made.

According to market sources, currently FII registration is a cumbersome process, which involves registration with Sebi and approval from RBI. 8216;The applicant is required to have a track record for a period of at least five years with professional competence, financial soundness, experience, general reputation of fairness and integrity. The applicant should be regulated by an appropriate Foreign Regulatory Authority such as a securities regulator, central bank or government ministry, agency or department,8217; sources said.

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The applicant has to appoint a local custodian and enter into an agreement with a custodian. Besides it also has to appoint a designated bank to route its transactions.