SEBI Eases Requirements For FPIs
Indian rupee and U.S. dollar banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

SEBI Eases Requirements For FPIs

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Easing the regulatory framework for foreign portfolio investors, the Securities and Exchange Board of India on Wednesday simplified KYC requirements for them and permitted them to carry out off-market transfer of securities.

The proposals were cleared by SEBI's board during its meeting as part of efforts to simplify and expedite the registration process for foreign portfolio investors.

Apart from doing away with the broad-based eligibility criteria for institutional FPIs, under the new framework, FPIs would be classified into two categories instead of three.

"Documentation requirements for KYC have been simplified," the market regulator said in a release after the board meeting.

FPI regulations have been redrafted based on the recommendation of a committee headed by former Reserve Bank of India deputy governor HR Khan.

The requirements for issuance and subscription of offshore derivative instruments have also been rationalised.

Also read: SEBI Approves Tighter Norms For Full Disclosure On Loan Defaults With Rating Agencies

Offshore funds floated by mutual funds would be allowed to invest in the country after registration as FPIs.

Among others, entities established in the International Financial Services Centre would be deemed to have met the 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," the release said.

Besides, registration for multiple investment manager structures has been simplified.

To attract more overseas funds into the market, central banks that are not members of the Bank for International Settlements would be eligible for registration as FPIs.

Also read: SEBI Board Meet: FPI Framework Rationalised, Norms For Credit Rating Agencies Amended

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