According to the new norms, FPIs have been divided into three categories based on their risk profile and the KYC requirements
Capital market regulator SEBI (Securities and Exchange Board of India) on Tuesday notified new foreign portfolio investor (FPI) regulations in order to ensure an easier registration process and operating framework for overseas investors seeking to invest in stock markets in India.
These regulations will be called the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014.
No person shall buy, sell or otherwise deal in securities as a FPI unless it has obtained a certificate granted by the designated depository participant on behalf of the Board, SEBI said in a notification.
Provided further that a qualified foreign investor may continue to buy, sell or otherwise deal in securities subject to the provisions of these regulations, for a period of one year from the date of commencement of these regulations, or until he obtains a certificate of registration as foreign portfolio investor, whichever is earlier.
According to the new norms, FPIs have been divided into three categories based on their risk profile and the KYC (know your client) requirements and other registration procedures would be much simpler for FPIs compared with current practices.
The category-I FPIs, which would be the lowest risk entities, would include foreign governments and government related foreign investors.
Category II FPIs would include appropriately regulated broad-based funds, appropriately regulated entities and broad-based funds, whose investment manager is appropriately regulated, university funds, university-related endowments and pension funds.
The Category III FPIs would include all others not eligible under the first two categories. Sebi said all existing FIIs and sub accounts may continue to buy, sell or otherwise deal in securities under the FPI regime.
The SEBI has also decided to grant them a permanent registration against the current practice of granting approvals for one year or five years to the overseas entities seeking to invest in Indian markets.
They will be permanent unless suspended or cancelled by the board or surrendered by FPI. Sebi said FPIs would need to apply for registration through designated depository participants (DDPs), subject to compliance with KYC norms.
Capital market regulator SEBI (Securities and Exchange Board of India) on Tuesday notified new foreign portfolio investor (FPI) regulations in order to ensure an easier registration process and operating framework for overseas investors seeking to invest in stock markets in India.
These regulations will be called the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014.
No person shall buy, sell or otherwise deal in securities as a FPI unless it has obtained a certificate granted by the designated depository participant on behalf of the Board, SEBI said in a notification.
Provided further that a qualified foreign investor may continue to buy, sell or otherwise deal in securities subject to the provisions of these regulations, for a period of one year from the date of commencement of these regulations, or until he obtains a certificate of registration as foreign portfolio investor, whichever is earlier.
According to the new norms, FPIs have been divided into three categories based on their risk profile and the KYC (know your client) requirements and other registration procedures would be much simpler for FPIs compared with current practices.
The category-I FPIs, which would be the lowest risk entities, would include foreign governments and government related foreign investors.
Category II FPIs would include appropriately regulated broad-based funds, appropriately regulated entities and broad-based funds, whose investment manager is appropriately regulated, university funds, university-related endowments and pension funds.
The Category III FPIs would include all others not eligible under the first two categories. Sebi said all existing FIIs and sub accounts may continue to buy, sell or otherwise deal in securities under the FPI regime.
The SEBI has also decided to grant them a permanent registration against the current practice of granting approvals for one year or five years to the overseas entities seeking to invest in Indian markets.
They will be permanent unless suspended or cancelled by the board or surrendered by FPI. Sebi said FPIs would need to apply for registration through designated depository participants (DDPs), subject to compliance with KYC norms.
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