Markets regulator Sebi on Monday allowed asset management companies (AMCs) to provide management and advisory services to appropriately regulated foreign portfolio investors (FPIs), that include pension funds, insurance company and banks.
Further, AMCs can provide such services to government and government related investors such as central banks, sovereign wealth funds, international or multilateral organisations or agencies, including entities controlled or at least 75 per cent directly or indirectly owned by such government and government related investors.
AMCs may provide management and advisory services to FPIs falling under the category of "appropriately regulated entities such as pension funds, insurance or reinsurance entities, banks," the markets watchdog said in a circular.
In case of agreements entered into by the AMCs till this Monday to provide management and advisory services to FPIs which do not fall under these categories, Sebi said that the AMCs may continue to provide the services for the period as mentioned in the agreement or one year from the date of this circular, whichever is earlier.
According to the regulator, government and government related investors as well as pension funds, insurance or reinsurance entities and banks should hold more than 50 per cent of shares or units in appropriately regulated FPIs.
The new norms would come into force with immediate effect, the Securities and Exchange Board of India (Sebi) said.
In September, the regulator broad-based the classification for FPIs and simplified their registration process.
Under the new framework, FPIs have been classified into two categories instead of three.