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SEBI Seeks to Calm FPI Nerves

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In a recent consultation paper, SEBI has put forth proposals seeking public comments to enhance investments by FPIs in India by facilitating increased participation from NRIs and OCIs as constituents of FPIs that are based out of IFSCs in India and regulated by the International Financial Services Centres Authority.

The SEBI Consultation Paper has invited comments on the proposals by September 10, 2023.
 
In this background, the views of Mr. Sumit Agrawal, Managing Partner, Regstreet Law Advisors have been featured in an article by the Financial Express (India).

Mr. Sumit Agrawal who was formerly a SEBI officer has observed that, “In the aftermath of the Ketan Parekh JPC Report, SEBI‘s cautious stance on involving NRIs and OCIs in FPI investments, prompted by concerns of potential market manipulation, remains pertinent. The spectre of market manipulation, as outlined in the Ketan Parekh Scam of 2001, continues to loom due to potential affiliations between individuals of Indian origin and domestic companies. Nevertheless, SEBI acknowledges the potential for harnessing NRI/OCI investments through meticulously managed FPIs, under the watchful eye of SEBI-registered custodians.

Mr. Sumit Agrawal added that the proposal arrives at a crucial juncture considering the compliance challenges highlighted the Adani-Hindenburg incident that directed both regulatory focus and SEBI scrutiny towards FPIs. He pointed out that the regulator’s willingness to embrace entities governed by the IFSC Authority reflects its forward-looking stride encouraging higher inflows of NRI / OCI and FPI investments and simultaneously keeping the ghosts of the Ketan Parekh Scam at bay.

The Financial Express (India) Article is enclosed below and can be accessed at: https://lnkd.in/djiHZxvZ.
 
Readers are welcome to send their views to Regstreet Law Advisors at info@regstreetlaw.com.

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