Sebi tightens Know Your Customer norms for foreign portfolio investors

Funds which do not comply with the new norms will not be able to take any new derivative positions after April

The Securities and Exchange Board of India (Sebi) has tightened some Know Your Customer (KYC) rules for foreign investors.

A circular it issued on Tuesday sets stiffer rules for foreign portfolio investors (FPIs) from ‘high risk’ jurisdictions and also from People of Indian Origin (PIOs) who control an FPI. These measures have been taken to align Sebi’s rules around the Prevention of Money Laundering Act.

According to the new rules, in an FPI structured as a company, a person owning 25 per cent stake would be considered the beneficial owner (BO). If structured as trust or partnership entity, the threshold