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Read more informationSEBI’s New Regulations 2019 for Foreign Portfolio Investors in India
In pursuance to the recommendations of the working group constituted by SEBI viz. Dr. Harun Khan and its report; the SEBI has rolled out new Foreign Portfolio Investors (FPI) Regulations 2019. The new Regulations have superseded the old Regulations pertaining to FPIs 2014. The new Regulations have refreshed and consolidated the regulatory regime for the FPIs.
The prime changes brought forth by these New Regulations are:
Companies incorporated in the international financial services centre (IFSC) are deemed fit to meet the criteria to register as FPI.
Provides for two categories viz. Category I i.e. low risk investors such as government entities and government related investors and Category II i.e. medium risk investors and less regulated. There are certain entities which are added in Category I, which are as follows:
The FPIs in category II that are well regulated funds or investors not eligible under category I FPIs such as endowments and foundations;
Furthermore, the Regulations requires that the offshore funds by Indian mutual funds which seek to invest in India’s securities market to be registered first
The Regulations have revised the investment range of a FPI or its group to 10% of total paid-up equity capital that is fully diluted from 10% of the total issued capital of the company, bringing it in consonance with Reserve Bank of India Regulations.
With overhaul of changes in FPI Regulations, the registration process for FPIs have been expedited as well as simplified. The reduction and harmonization of regulations is to give fillip to foreign portfolio investments in India.