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Sebi today eased the norms for foreign portfolio investors, including doing away with the prior-approval requirement in case of change in local custodian. The due diligence requirements at the time of change of custodian for FPIs have also been relaxed. In consultation with stakeholders, Sebi has decided to make changes in extant regulatory provisions "to ease the access norms for investment by Foreign Portfolio Investors (FPIs)", a circular said. The need for seeking prior approval in case of change in local custodian or Designated Depository Participant (DDP) has been discontinued for the FPIs "At that time, taking specific request letter from each FPI regarding change of local custodian may create operational and logistical challenges," Sebi said as it relaxed the norms. With respect to the process of change of local custodian or DDP by an FPI, the circular said the new entity can rely on the due diligence carried out by the old one. "However, the new DDP is required to carry out adequate due diligence at the time when the FPI applies for continuance of its registration on an ongoing basis," it noted. Among others, the markets regulator has decided to permit appropriately regulated private bank and merchant bank to invest on behalf of their clients, subject to certain conditions. "It has been decided that private bank/ merchant bank may invest on behalf of their clients provided that the banks do not have any secrecy arrangement with the investors and secrecy laws do not apply to the jurisdictions in which the bank is regulated. "Further, details of beneficial owners of investors are available and would be provided as and when required by regulators," the circular said.
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