Sebi allows foreign venture funds to register as FPIs

Capital markets regulator Sebi today said Foreign Venture Capital Investors (FVCIs) can be granted registration as a foreign portfolio investor if they meet certain guidelines.
The announcement comes following a query from designated depository participant seeking clarification with regard to any restrictions on applicants, holding registration as a FVCI, from obtaining registration as a FPI (Foreign Portfolio Investor).
FVCI is an investor incorporated or established outside of India who can invest either in a domestic venture capital fund or a venture capital undertaking (domestic unlisted company), while FPI comprises of FIIs, sub-accounts and Qualified Foreign Investors.
In the circular, Securities and Exchange Board of India (Sebi) said depository participants may consider an applicant, holding FVCI registration, for grant of registration as a FPI.

The capital markets regulator "do not expressly prohibit FVCI from holding registration as a FPI."
However, the registration is subject to certain criteria like the applicant complies with the eligibility criteria as prescribed under the FPI regulations.
Other criteria include funds raised, allocated and invested must be clearly segregated for both registrations, reporting of transactions must be done separately and there should be clear segregation of securities held under FVCI and FPI registrations.
"Separate accounts must be maintained with the custodian for execution of trades. However, such an applicant shall have same custodian for its activities as FPI and FVCI," Sebi noted.