SEBI issues Circular regarding management and advisory services by AMCs to FPIs

Dec 17, 2019 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Securities Exchange Board of India (SEBI) on December 16, 2019, has decided that Asset Management Companies (AMCs) to provide management and advisory services to Foreign Portfolio Investors (FPIs). SEBI amends the Circular No. SEBI/LAD-NRO/GN/2019/37 dated September 23, 2019, related to “Restrictions on business activities of the asset management company”.

Thus, SEBI has decided that AMCs may provide management and advisory services in terms of provisions of SEBI (Mutual Funds) Regulations, 1996 related to FPIs falling under the following categories of FPIs as specified in SEBI (Foreign Portfolio Investors) Regulations, 2019:

  1. Government and Government related investors such as central banks, sovereign wealth funds, international or multilateral organizations or agencies including entities controlled or at least 75% directly or indirectly owned by such Government and Government-related investor(s);
  2. Appropriately regulated entities such as pension funds, insurance or reinsurance entities, banks and mutual funds;
  3. Appropriately regulated FPIs wherein (a) or (b) above hold more than 50% of shares or units.

Further, the AMCs which have entered into agreements on or before December 16, 2019, to provide management and advisory services to such FPIs which are not falling under the above categories, the AMCs may continue to provide the services for the period as mentioned in the agreement or one year, whichever is earlier.

[SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2019/155]


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