SEBI issues operational guidelines for Foreign Portfolio Investors and Designated Depository Participants

Nov 06, 2019 | by Avantis RegTech Legal Research Team


The Securities Exchange Board of India (SEBI) on November 05, 2019, have issued operational guidelines for foreign portfolio investors (FPIs) and Designated Depository Participants (DDPs) to facilitate the implementation of SEBI (Foreign Portfolio Investors) Regulations, 2019. The Foreign Portfolio Investors Regulations came into force from September 23, 2019 under which all insurance entities and funds from FATF member countries have been classified as Category-I FPIs. The unregulated funds or entity where the regulated investment manager is from non-FATF member country would be under Category-II. An FPI can seek recategorisation from Category II to I after providing requisite information and applicable fees to the DDP. In the event of a breach of the sectoral cap or aggregate FPI limit or aggregate NRI limit, the foreign investors shall divest their excess holding within 5 trading days from the date of settlement of the trades, by selling shares only to domestic investors.

SEBI specifies about the followings:-

1. FPI’s registration related activities; 

2. KYC documentation requirements for FPI;

3. Restrictions and investment conditions on FPIs;

4. Issuance of Offshore Derivative Instruments by FPIs;

5. Guidelines for participation or functioning of Eligible Foreign Investors (EFIs) in International Financial Services Centre (IFSC).

[SEBI Circular No. IMD/FPI&C/CIR/P/2019/124]


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