Amendment to SEBI Circular on Know Your Client Requirements for Foreign Portfolio Investors

Aug 22, 2018 | by Avantis RegTech Legal Research Team


The Securities and Exchange Board of India (SEBI) vide Circular No. CIR/IMD/FPIC/CIR/P/2018/64 dated April 10, 2018 had prescribed Know Your Client Requirements for Foreign Portfolio Investors (FPIs) in order to strengthen KYC framework for FPIs in accordance with Prevention of Money–laundering (Maintenance of Records) Rules, 2005 (PMLA Rules). Accordingly, existing FPIs were provided a time frame of six months from the date of circular to comply with the requirements stipulated therein. 

The following timelines had been prescribed in the aforesaid circular:

1.       Existing FPIs were required to provide the list of beneficial owners (BO), in the format prescribed at para 2(b) of the aforesaid circular, within six months from the date of the circular,

2.      The existing FPI structures not in conformity with the requirement specified at para 2(c) of the aforesaid circular were required to change their structure or close their existing position in Indian securities market within six months from the date of the circular.

3.       The existing FPIs or their investors identified on basis of threshold for identification of BO in accordance with Rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 who do not conform to the requirements prescribed at para 2(d) of the aforesaid circular, were required to ensure compliance within six months of the date of the circular.

4.      In respect of para 2(g) of the aforesaid circular, the existing FPIs were required to provide the documents specified therein within six months from the date of the circular.

5.       All existing FPIs whose clubbed investment in equity shares of a company is in breach of the provisions of Regulation 21(7) of Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 were required to ensure compliance within six months from the date of the circular (para 3 of the aforesaid circular).

SEBI has received representations from some market participants in relation to the circular, inter-alia, seeking review and additional time for complying with the said circular.  The above listed timelines are hereby extended to December 31, 2018.

All other terms and conditions specified in the aforesaid circular dated April 10, 2018 shall remain unchanged.

[Circular No.: IMD/FPIC/CIR/P/2018/124]

 

URL: https://www.sebi.gov.in/legal/circulars/aug-2018/amendment-to-sebi-circular-no-cir-imd-fpic-cir-p-2018-64-dated-april-10-2018-on-know-your-client-requirements-for-foreign-portfolio-investors-fpis-_40065.html


Bookmark

Related Updates



Alternate Text

Get updates on the go on RuleZbook Mobile App.