The Hindu Business Line : Resident investors, FIIs brought under MAPIN net

THE Securities and Exchange Board of India (SEBI) has made it mandatory for certain resident investors and all foreign institutional investors (FIIs) to obtain unique identification number (UIN) under the Market Participants and Investors (MAPIN) database before March 31, 2005.

The MAPIN database, which was launched in November 2003, is aimed at creating an inventory of capital market participants and investors. National Securities Depository Ltd (NSDL) is maintaining the MAPIN database. Already capital market intermediaries and corporates have been directed to obtain UIN under MAPIN before certain specified dates.

Informed sources said that the capital market regulator has now held that resident investors (not body corporates) who enter into securities market transactions of value of Rs 1 lakh or more have to obtain UIN by March 31, 2005 if they are to buy, sell or deal in capital market securities after that date.

The securities market transactions would include any transactions in primary market or secondary market in any listed securities and any transactions in units of mutual funds or collective investment schemes.

The SEBI has held that investors who are "persons resident in India" within the meaning of Clause (v) of Section 2 of the Foreign Exchange Management Act (FEMA) 1999 would be considered as "resident investors".

Similarily, all FIIs, sub-accounts and foreign venture capital investors (FVCIs) have been directed to obtain their UIN under MAPIN before March 31, 2005. Such investors cannot undertake securities market transactions without a UIN from this date, informed sources said.

Resident investors, FIIs, sub-accounts and FVCIs have been held as "specified investors" under the SEBI (Central Database of Market Participants) Regulations 2003.

After a reasonable build-up of data in the MAPIN database, investors are expected to be in a position to view basic information of an intermediary and whether the intermediary is facing any disciplinary action. Further, an intermediary can verify the client identity with the MAPIN database.

SEBI and self-regulated organisations are to be enabled to update regulatory record of the registered entities on the MAPIN database so that this information is available for public information through Internet.

Brokers and depository participants are also to be enabled to update the address of investors in the MAPIN database.

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