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Easing the regulatory framework for foreign portfolio investors (FPI), the Securities and Exchange Board of India (SEBI) on Wednesday simplified the KYC requirements. It also permitted them to carry out off-market transfer of securities.
The proposals were cleared by the SEBI’s board during its meeting here as part of efforts to simplify and expedite the registration process for FPIs.
Apart from doing away with the broad-based eligibility criteria for institutional FPIs, under the new framework, FPIs would be classified into two categories instead of three.
FPI regulations have been redrafted based on the recommendation of a committee headed by former RBI deputy governor H R Khan.
The requirements for issuance and subscription of offshore derivative instruments (ODIs) have also been rationalised.
Offshore funds floated by mutual funds would be allowed to invest in the country after registration as FPIs.
Among others, entities established in the International Financial Services Centre (IFSC) would be deemed to have met the criteria for FPIs.
“FPIs shall be permitted for off-market transfer of securities which are unlisted, suspended or illiquid, to a domestic or foreign investor,” the release said.
Besides, registration for multiple investment manager (MIM) structures has been simplified.
To attract more overseas funds into the market, central banks that are not members of the Bank for International Settlements would be eligible for registration as FPIs.
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