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๐’๐„๐๐ˆ ๐’๐ข๐ฆ๐ฉ๐ฅ๐ข๐Ÿ๐ข๐ž๐ฌ ๐‘๐ž๐ ๐ฎ๐ฅ๐š๐ญ๐ข๐จ๐ง๐ฌ ๐Ÿ๐จ๐ซ ๐…๐๐ˆ๐ฌ

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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:

๐„๐ฑ๐ž๐ฆ๐ฉ๐ญ๐ข๐จ๐ง ๐Ÿ๐ซ๐จ๐ฆ ๐€๐๐๐ข๐ญ๐ข๐จ๐ง๐š๐ฅ ๐ƒ๐ข๐ฌ๐œ๐ฅ๐จ๐ฌ๐ฎ๐ซ๐ž ๐‘๐ž๐ช๐ฎ๐ข๐ซ๐ž๐ฆ๐ž๐ง๐ญ๐ฌ ๐Ÿ๐จ๐ซ ๐‚๐ž๐ซ๐ญ๐š๐ข๐ง ๐…๐๐ˆ๐ฌ: 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.

๐‘๐ž๐ฅ๐š๐ฑ๐ž๐ ๐“๐ข๐ฆ๐ž๐ฅ๐ข๐ง๐ž๐ฌ ๐Ÿ๐จ๐ซ ๐‘๐ž๐ฉ๐จ๐ซ๐ญ๐ข๐ง๐  ๐Œ๐š๐ญ๐ž๐ซ๐ข๐š๐ฅ ๐‚๐ก๐š๐ง๐ ๐ž๐ฌ ๐›๐ฒ ๐…๐๐ˆ๐ฌ: 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.

๐ˆ๐ง๐œ๐ซ๐ž๐š๐ฌ๐ž๐ ๐…๐ฅ๐ž๐ฑ๐ข๐›๐ข๐ฅ๐ข๐ญ๐ฒ ๐Ÿ๐จ๐ซ ๐…๐๐ˆ๐ฌ ๐‘๐ž๐ ๐š๐ซ๐๐ข๐ง๐  ๐’๐ž๐œ๐ฎ๐ซ๐ข๐ญ๐ข๐ž๐ฌ ๐๐จ๐ฌ๐ญ-๐‘๐ž๐ ๐ข๐ฌ๐ญ๐ซ๐š๐ญ๐ข๐จ๐ง ๐„๐ฑ๐ฉ๐ข๐ซ๐ฒ: 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 SEBIโ€™s 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.

Readers are welcome to send their views toย Regstreet Law Advisors atย info@regstreetlaw.com

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