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Market regulator Sebi now mandates legal entity identifier for FPIs

LEI is a unique 20-character code used globally to identify distinct financial entities

SEBI, FPI

Khushboo Tiwari Mumbai

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The Securities and Exchange Board of India (Sebi) has mandated the submission of legal entity identifier (LEI) details for all non-individual foreign portfolio investors (FPIs).

LEI is a unique 20-character code used globally to identify distinct financial entities.

Currently, LEI is only sought voluntarily during registration and know-your-customer (KYC) formalities. However, all existing FPIs have been directed to update their LEI with designated depository participants (DDPs) within six months; failure to do so will lead to the blocking of their accounts.

Furthermore, all fresh registrations will also mandatorily require LEI submission. Accounts of FPIs with lapsed LEIs will be blocked until they are renewed.

In an email communication sent earlier in May, the capital markets regulator had asked DDPs to identify the parent institution as the legal entity, rather than the sub-funds. During that time, DDPs were required to complete KYC at the legal entity level and update beneficial owner data by September 30.

Sebi has recently tightened the disclosure requirements for FPIs with over 50 per cent exposure to a single corporate group and those with aggregate equity holdings of more than Rs. 25,000 crore in domestic equities.

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First Published: Jul 27 2023 | 9:07 PM IST

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