Select Your Location
In an attempt to facilitate the ease of doing business and to reduce the time taken for registration of Foreign Portfolio Investors (“FPIs”) under the SEBI (Foreign Portfolio Investors) Regulations (“FPI Regulations”), SEBI, in its new circular dated March 27, 2023, simplifies the procedural requirements for onboarding of FPIs. Together with the procedural adjustments, SEBI has also given its approval to certain amendments to the various timelines outlined in the FPI Regulations. We will talk about the new circular and the main aspects of the new notification in this blog.
Table of Contents
With the purpose of easing the onboarding of FPIs, the SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2023, were notified on March 14, 2023. In accordance with Regulation 3 (2) of the SEBI (Foreign Portfolio Investors) Regulations, 2019, a request for the issuance of a certificate as a foreign portfolio investor must be made to a Designated Depository Participant (or “DDP”) in the form and manner specified by the Government or the Board from time to time.
It must be accompanied by the fee listed in Part A of the Second Schedule and any supporting documentation in the manner specified by the Board from time to time. As per Regulation 3(1), No person may purchase, sell, or otherwise transact in securities as a foreign portfolio investor unless such person has obtained a certificate from a designated depository participant on behalf of the Board.
The Securities and Exchange Board of India is responsible for regulating foreign portfolio investment in India (SEBI). Investment groups or FIIs (foreign institutional investors) and QFIs (Qualified Foreign Investors) are referred to as FPIs in India.
Securities and other financial assets held by investors in a foreign nation are included in foreign portfolio investment (FPI). Based on market volatility, it is relatively liquid and does not provide the investor with direct ownership of the company’s assets. Together with foreign direct investment, FPI is a popular technique for investing in a foreign economy. Both FDI and FPI are well-known to be significant financial sources for most economies.
It enables businesses to raise huge amounts of capital without raising hefty expenses. Exchange rate variations can be quite profitable for investors. FPIs inevitably gravitate towards more expansive markets with less rivalry. For any investor, this combination is comparatively attractive.
Grant of Foreign Portfolio Investors registration on the basis of scanned copies of application forms and supporting documents:
The Foreign Portfolio Investors registration may now be granted by designated depository participants (DDPs) on the basis of scanned copies of the application form and any required supporting documentation. Also, the Securities and Exchange Board of India has permitted DDPs (Designated Depository Participants) to recognise Foreign Portfolio Investors use of digital signatures while executing documents connected to registration.
The action will shorten the registration period. At present, FPI applicants must deliver physical application forms and supporting documents, as well as scanned copies, to the DDPs in order to be registered as an FPI. It should be noted that while registration on the basis of scanned copies has been permitted, trade can only be started after the actual documents have been verified.
Certification of copies of original documents by authorised bank officials using the SWIFT mechanism:
According to the circular, Sebi has permitted authorised bank employees to use the SWIFT system for certification of copies of original documents given by FPIs in an effort to lessen the physical movement of documents and the time required for registration. These actions are intended to speed up the onboarding process for FPIs, shorten the time needed to grant registration, and open demat, trading, and bank accounts for FPIs.
PAN verification using the CAF module accessible via the Depositories’ websites:
The DDP/Custodian may validate the FPI’s PAN based on its availability on the CAF module hosted on the depositories’ website. The PAN is reflected via an automatic secure feed from the Income Tax Department, in circumstances when the FPI applicant submits a PAN application through the CAF Portal.
FPI applicants may submit a unique investor group ID rather than comprehensive information on the members of the group:
Sebi’s latest circular will be applicable with immediate effect. The Securities and Exchange Board of India Act, 1992’s Section 11 (1) powers were used to issue this circular. The FPI industry urgently needs the actions mentioned above since the procedural leniencies they have suggested will undoubtedly help to increase the number of foreign investors in the Indian listed market.
Also Read: How Foreign Portfolio Investors can Invest in India?
I am a driven and meticulous professional who completed B.Com BL (Hons) from Tamil Nadu Dr. Ambedkar Law University and completed Master of Laws in specialization (Criminal Law with Cyber Crimes). I have extensive experience in Criminal Litigation and want to utilise my legal knowledge in writing also I have proficiency in writing legitimate content with comprehensive research. My core areas of interest are Business Law, Intellectual Property Rights, and Cyber crimes.
The Financial Action Task Force, i.e. FATF (the Force), is the global money laundering and terr...
Advance tax refers to the payment of the tax liability before the end of the relevant financia...
On 11.12.15, the Hon’ble Delhi High Court (HC) pronounced a landmark judgement in the case ti...
Money laundering can be defined as the process of illegal concealment of the origin of money ob...
Every assessee in India is obligated to file an income tax return and make the timely payment o...
In the recent past, India has seen burgeoning demand for internet and smartphones. The rapid ri...
The Securities and Exchange Board of India (SEBI), the capital markets regulator, has recommend...
The objective of the enactment of the Prevention of Money-laundering Act, 2002, i.e. PMLA (the...
Tax planning is a continuing effort and a management strategy for ensuring the minimization of...
On 18th May 2023, the Securities Exchange Board of India (SEBI) released a Consultation Paper o...
Are you human?: 1 + 8 =
Easy Payment Options Available No Spam. No Sharing. 100% Confidentiality
An option contract is a kind of derivative contract wherein one party is given the right to exercise its option of...
27 Apr, 2019
The Alternative Investment Fund (AIF) varies from the regular traditional investments such as securities and stocks...
23 Oct, 2020
Red Herring Top 100 Asia enlists outstanding entrepreneurs and promising companies. It selects the award winners from approximately 2000 privately financed companies each year in the Asia. Since 1996, Red Herring has kept tabs on these up-and-comers. Red Herring editors were among the first to recognize that companies such as Google, Facebook, Kakao, Alibaba, Twitter, Rakuten, Salesforce.com, Xiaomi and YouTube would change the way we live and work.
Researchers have found out that organization using new technologies in their accounting and tax have better productivity as compared to those using the traditional methods. Complying with the recent technological trends in the accounting industry, Enterslice was formed to focus on the emerging start up companies and bring innovation in their traditional Chartered Accountants & Legal profession services, disrupt traditional Chartered Accountants practice mechanism & Lawyers.
Stay updated with all the latest legal updates. Just enter your email address and subscribe for free!
Chat on Whatsapp
Hey I'm Suman. Let's Talk!