In a recent board meeting, SEBI has approved several amendments to the SEBI (Foreign Portfolio Investors) Regulations, 2019, aiming to streamline processes and enhance the ease of doing business for FPIs. Key amendments include:
๐๐ฑ๐๐ฆ๐ฉ๐ญ๐ข๐จ๐ง ๐๐ซ๐จ๐ฆ ๐๐๐๐ข๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐ข๐ฌ๐๐ฅ๐จ๐ฌ๐ฎ๐ซ๐ ๐๐๐ช๐ฎ๐ข๐ซ๐๐ฆ๐๐ง๐ญ๐ฌ ๐๐จ๐ซ ๐๐๐ซ๐ญ๐๐ข๐ง ๐ ๐๐๐ฌ: SEBIhas decided to waive off extra disclosure requirements for FPIs that have more than 50% of their Indian equity Assets Under Management (AUM) concentrated in a single corporate group, under two conditions: (i) The FPI’s investment in the corporate group, excluding any stake in the parent company without an identifiable promoter, should not exceed 50% of its total equity AUM in India; and (ii) The aggregate investment of all such FPIs meeting the 50% concentration threshold in a company without a an identifiable promoter should be less than 3% of the company’s total equity share capital.
๐๐๐ฅ๐๐ฑ๐๐ ๐๐ข๐ฆ๐๐ฅ๐ข๐ง๐๐ฌ ๐๐จ๐ซ ๐๐๐ฉ๐จ๐ซ๐ญ๐ข๐ง๐ ๐๐๐ญ๐๐ซ๐ข๐๐ฅ ๐๐ก๐๐ง๐ ๐๐ฌ ๐๐ฒ ๐ ๐๐๐ฌ: Previously, FPIs were required to inform their Designated Depository Participant (DDP) about significant changes within 7 working days. Now, SEBI has introduced a bifurcation of material changes into Type I and Type II, with Type I changes still needing to be reported within 7 working days (and supporting documents within 30 days), while Type II changes have a 30-day window for both reporting and submission of relevant documents.
๐๐ง๐๐ซ๐๐๐ฌ๐๐ ๐ ๐ฅ๐๐ฑ๐ข๐๐ข๐ฅ๐ข๐ญ๐ฒ ๐๐จ๐ซ ๐ ๐๐๐ฌ ๐๐๐ ๐๐ซ๐๐ข๐ง๐ ๐๐๐๐ฎ๐ซ๐ข๐ญ๐ข๐๐ฌ ๐๐จ๐ฌ๐ญ-๐๐๐ ๐ข๐ฌ๐ญ๐ซ๐๐ญ๐ข๐จ๐ง ๐๐ฑ๐ฉ๐ข๐ซ๐ฒ: FPIs whose registrations lapse due to non-payment of fees can now reactivate their registration within 30 days, during which they are allowed to dispose of their securities. If the registration is not renewed within this period, an additional 180 days are granted for the disposal of securities. For disposals necessitated by an adverse change in the FPI’s home jurisdiction compliance status or failure to submit documents for category reclassification from I to II, a period of at least 180 days, or until the end of the registration period (whichever is later), is provided. An extension of another 180 days is available with a 5% financial penalty / disincentive, to be credited to SEBIโs Investor Protection and Education Fund (IPEF).
Existing cases are given a one-time 360-day disposal window (180 days without penalty, followed by an additional 180 days with a 5% disincentive). Securities remaining unsold after this period will be compulsorily written off and transferred to an escrow account managed by an exchange-empaneled broker for sale.
SEBI‘s budget for the financial year 2024-25 was also separately approved amongst other agenda items in this board meeting.
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