Goodbye FII, hello FPI

From now on, new overseas investors wanting to enter Indian market will be registered under FPI Regulations

The new foreign portfolio investor (FPI) regulations, which replaces the two-decade old foreign institutional investors (FII) regime, in the Indian market has got operational from today.

From now on, new overseas investors wanting to enter the Indian market will be registered under the FPI Regulations.

The regulation was notified by Sebi in January 2014, however, certain regulatory and taxation hurdles delayed the implementation of the FPI norms.

The FPI regulations aimed at reducing the entry barriers for overseas investors. Investors from new geographies such as Tokyo, Hong Kong and Australia are said to have expressed interest to register under the new FPI regulations.

“It is now easier and faster for foreign investors to access the Indian market and this is a positive development for the country which is attracting more interest from overseas investors,” said Kapil Seth, Head HSBC Securities Services India, a designated depository participant (DDP), a link between the regulator and investor. Existing FIIs and sub-accounts that are due for renewal will have to register under new FPI regime.

On the other hand, existing QFIs will have to register within a year.