SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2018

Apr 11, 2018 | by Avantis RegTech Legal Research Team

Securities and Exchange Board of India (SEBI) on April 5, 2018 has published the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2018 to further amend the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014.

In the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, -

I.                    in Regulation 4, to clause (b) the following proviso shall be inserted, namely,-

“Provided that an applicant falling under Category I foreign portfolio investor, as defined in clause (a) of Regulation 5, shall be considered as eligible for registration, if the applicant is a resident in a country as may be approved by the Government of India.”

II.                  to Regulation 4, the following proviso shall be inserted after clause (k) and before the explanation to Regulation 4, namely,-

“Provided that, in respect of a Category I or Category II foreign portfolio investor, as defined in clause (a) or clause (b) of Regulation 5, clauses (f), (g) (h) and (i) of this regulation shall not be applicable.”

III.                in Regulation 5, in clause (b), in sub-clause (ii), after the words “portfolio manager” and before the symbol “;” insert the following words and symbol, namely,-

“, broker dealers and swap dealers”

IV.                in Regulation 5, in the second explanation to clause (b), in clause A), after the existing proviso following provisos shall be inserted, namely,-

“Provided further that if a foreign portfolio investor has a Bank, Sovereign Wealth Fund, Insurance/Reinsurance company or a Pension Fund as its institutional investor, then such an applicant shall be deemed to be broad based subject to the condition that such institutional investor(s) shall, jointly or separately, hold more than fifty pe rcent of the shares or units of the fund in the applicant fund at all times: Provided also that in cases where broad based status is achieved on the basis of investor(s) of an underlying fund, then such underlying fund shall also be required to fulfil the extant eligibility requirements as specified for foreign portfolio investors from time to time by the Board.”

V.                  in Regulation 5, in the second explanation to clause (b), after clause C), the following clause shall be inserted, namely,-

“D) Exit of some investors from a broad based fund will not result in immediate loss of Category II status of such fund. Such fund may regain broad based status within a period of 90 days, failing which, the fund shall be appropriately re-categorised.”

VI.                in Regulation 23(1), -

i.                    existing clauses (h) and (i) shall be re-numbered as clauses (i) and (j) respectively;

ii.                  after clause (g) and before clause (i) the following clause (h) shall be inserted, namely, - “(h) be a fit and proper person based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008;”

iii.                for clause (j) the following clause shall be substituted, namely, -

“(j) provide any additional information or documents including beneficiary ownership details of their clients as may be required by the designated depository participant or the Board or any other enforcement agency to ensure compliance with the Prevention of Money Laundering Act, 2002 and the rules and regulations prescribed thereunder, the Financial Action Task Force standards and circulars issued from time to time by the Board.”

VII.              in Regulation 32(2), to clause (d) the following explanation shall be inserted, namely,-

“Explanation. - An encumbrance created to meet any statutory and regulatory requirements shall not be considered under this clause.”

[Notification No. SEBI/LAD-NRO/GN/2018/05]

URL: http://www.egazette.nic.in/WriteReadData/2018/184668.pdf


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