Extend withdrawal of surcharge to debt instruments, say foreign investors' group

A leading grouping of overseas investors has said that withdrawal of surcharge rates should be extended to debt investments as well.

On the recent regulatory developments in the country, Hong Kong-based ASIFMA said that they welcome the recent decision to withdraw the increased surcharge rates applicable to non-corporate FPIs, specifically on capital gains with respect to equities.

"However, we note that this withdrawal is not extended to FPI investments in debt and urge that the same be extended to debt investments as well," it said in a statement.

Giving in to the demands of overseas investors, the government last week rolled back enhanced surcharge on foreign portfolio investors levied in the Budget.

The trade association also said that it was pleased with the decisions made at Sebi's board meeting on 22 August and find the outcome generally positive at this point.

"We very much welcome the removal of the broad-based requirements and other amendments to simplify and rationalise the FPI regulations. We hope that Sebi will consult with the industry on the details of the amended regulations so that they reflect the decisions of the Sebi board and we look forward to having the opportunity to provide our feedback on the details," it added.

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

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

ASIFMA is an independent, regional trade association with over 100 member firms comprising a diverse range of leading financial institutions from both the buy and sell side, including banks, asset managers, professional services firms and market infrastructure service providers.