Sebi simplifies FPIs onboarding process. Check latest rules
To make doing business easier, market regulator Sebi has simplified the procedural requirements for onboarding Foreign Portfolio Investors (FPIs).
To make doing business easier, market regulator Sebi has simplified the procedural requirements for onboarding Foreign Portfolio Investors (FPIs).
Sebi has allowed Designated Depository Participants (DDPs) to grant FPI registration based on scanned copies of application forms and receipts. Additionally, the Securities and Exchange Board of India has allowed DDPs to accept the use of digital signatures by FPIs for the execution of registration-related documents.
Sebi has allowed Designated Depository Participants (DDPs) to grant FPI registration based on scanned copies of application forms and receipts. Additionally, the Securities and Exchange Board of India has allowed DDPs to accept the use of digital signatures by FPIs for the execution of registration-related documents.
The move will help reduce registration time.
The move will help reduce registration time.
Currently, FPI applicants are required to send both scanned copies and physical documents of application forms and supporting documents to DDPs in order to obtain FPI registration.
Currently, FPI applicants are required to send both scanned copies and physical documents of application forms and supporting documents to DDPs in order to obtain FPI registration.
It should be noted that registration was allowed to be granted on the basis of scanned copies, but trading can only be activated after verification of physical documents, it said.
It should be noted that registration was allowed to be granted on the basis of scanned copies, but trading can only be activated after verification of physical documents, it said.
In addition, the regulator has allowed verification of PAN by DDPs via the Common Application Form (CAF) module available on custodian websites. Currently, DDPs can only verify the PAN after receiving a paper copy of the PAN from the applicant.
In addition, the regulator has allowed verification of PAN by DDPs via the Common Application Form (CAF) module available on custodian websites. Currently, DDPs can only verify the PAN after receiving a paper copy of the PAN from the applicant.
In order to reduce the physical movement of documents and the time required for registration, according to the circular, Sebi has allowed authorized bank officials to use the SWIFT mechanism to certify copies of original documents submitted by FPIs.
In order to reduce the physical movement of documents and the time required for registration, according to the circular, Sebi has allowed authorized bank officials to use the SWIFT mechanism to certify copies of original documents submitted by FPIs.
These steps are aimed at facilitating the onboarding process of FPIs and reducing the time it takes for registration to be granted and FPIs’ Demat, trading and bank accounts to be opened, the Sebi said.
These steps are aimed at facilitating the onboarding process of FPIs and reducing the time it takes for registration to be granted and FPIs’ Demat, trading and bank accounts to be opened, the Sebi said.
As a practical matter, Sebi said if an FPI applicant belongs to an existing FPI investor group, they can submit their unique FPI investor group ID in the CAF, rather than providing full details of all group members.
As a practical matter, Sebi said if an FPI applicant belongs to an existing FPI investor group, they can submit their unique FPI investor group ID in the CAF, rather than providing full details of all group members.
If the applicant wishes to include additional FPIs (other than itself) in such a unique investor group ID, the FPI need only provide details of such additional FPIs along with the investor group ID, it said.
If the applicant wishes to include additional FPIs (other than itself) in such a unique investor group ID, the FPI need only provide details of such additional FPIs along with the investor group ID, it said.
Currently, an FPI applicant is required to provide information at the time of registration for FPIs with which it shares more than 50 percent ownership or common control. Custodians, in turn, generate a unique FPI Investor Group ID to identify each of these FPI Investor Groups.
Currently, an FPI applicant is required to provide information at the time of registration for FPIs with which it shares more than 50 percent ownership or common control. Custodians, in turn, generate a unique FPI Investor Group ID to identify each of these FPI Investor Groups.
The latest circular from Sebi is effective immediately
The latest circular from Sebi is effective immediately
Earlier this month, Sebi issued strict standards for FPIs, requiring them to disclose any material changes to their structure and common ownership within seven working days. Regarding new FPI registrations, the regulator may ask them for additional documents that may be required.
Earlier this month, Sebi issued strict standards for FPIs, requiring them to disclose any material changes to their structure and common ownership within seven working days. Regarding new FPI registrations, the regulator may ask them for additional documents that may be required.