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Sebi puts more safeguards for FPI investors

Sebi has also allowed category-II FPIs to act as participatory notes (p-notes) issuers

BS Reporter 


Market regulator has further amended the “Easing of access norms for investment by FPIs” circular by providing further safeguards. In the new circular, has asked private banks who invest on behalf of their clients to collect proper details from

The regulator has said this route cannot be used by Also, the collective investment a private bank makes on behalf its clients should be broad-based. A collective investment by the bank should have more than 20 with no single one owning more than 49 per cent. 

has also allowed category-II FPIs to act as (p-notes) issuers. But, such funds should apply for a separate registration and would also have to fulfil the broad-basing criteria along with the requirement of a common portfolio.

This clarification from comes after several market participants expressed their reservations about allowing foreign banks to invest on behalf of their clients on concerns that the route could be misused, like has also said the insurance/reinsurance companies will not be allowed to maintain a segregated portfolio.

Currently, it is a common practice among foreign insurance companies to maintain separate portfolios for unit-linked products and proprietary funds. 

First Published: Tue, March 13 2018. 23:34 IST