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Sebi comes out with common application form for FPI registration

Earlier in September, the regulator had broad-based the classification for foreign portfolio investors and simplified their registration process.

Press Trust of India  |  New Delhi 

Sebi

regulator on Tuesday come out with a common application form for registration of foreign portfolio investors in order to enhance operational flexibility and ease of access to Indian capital market.

Depository participants have been asked to continue to accept in-transit registration applications, for a period of 60 days, (Sebi) said in a circular.

The regulator has come out with a Common Application Form (CAF) for registration of FPIs, allotment of Permanent Account Number (PAN) and carrying out of Know Your Customer (KYC) for opening of bank and demat accounts.

The applicants seeking registration need to fill the common form prescribed by the regulator, declaration providing supporting documents and applicable fees for registration and issuance of PAN.

"The other intermediaries dealing with FPIs may rely on the information in CAF for the purpose of KYC," it added.

With regard to additional information, said that Category I FPIs (most well-regulated ones) have to apply for separate registration for the purposes of hedging the offshore derivative instruments (ODIs) with derivatives as underlying in India as well as details of eligible Category I entity.

Besides, information regarding 'Ultimate Beneficial Owner' for each fund that invests in India needs to be disclosed and entities required to declare that they are not a bank or a subsidiary of a bank.

Earlier in September, the regulator had broad-based the classification for foreign portfolio investors and simplified their registration process.

Under the new framework, FPIs have been classified into two categories instead of three. Earlier, had classified FPIs into three categories with the easier compliance norms for Category-I FPIs and the strictest for Category-III FPIs. The most well-regulated FPIs come under Category-I.

As per the new rule, the 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 investor; pension and university funds would fall under the Category-I FPIs.

Besides, appropriately regulated entities such as insurance or reinsurance entities, banks, asset management companies, investment managers, investment advisors, portfolio managers, broker dealers and swap dealers will come under the Category-I.

Category-II FPIs include all the investors not eligible under Category-I foreign portfolio investors such as endowments and foundations; charitable organisations; corporate bodies; family offices; individuals; appropriately regulated entities investing on behalf of their client; and unregulated funds in the form of limited partnership and trusts.

First Published: Tue, February 04 2020. 20:26 IST
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