Resident Indians can be part of FPIs registered as AIFs in IFSC, says Sebi

New Delhi: Markets regulator Sebi on Thursday allowed resident Indians, other than individuals, to become constituents of foreign portfolio investors (FPIs) that are registered as alternative investment funds (AIFs) in IFSCs. This will facilitate investment in Indian securities markets through the FPI route by AIFs set up in International Financial Services Centres (IFSCs).

Such resident Indians will be sponsor or manager of the FPI and their contribution in the FPI will be subject to certain conditions. In a notification, Sebi said "resident Indian, other than individuals, may also be constituents of the applicant."

This is subject to the conditions that the applicant should be an AIF set-up in the IFSCs and regulated by the International Financial Services Centres Authority. The contribution of such resident Indian in the FPI will be up to 2.5 per cent of the corpus of the applicant or $7,50,000 (whichever is lower), in case the applicant is a Category I or Category II AIF, while for Category III AIF it will be 5 per cent of the corpus or $1.5 million (whichever is lower).

To give effect to this, the Securities and Exchange Board of India (Sebi) has amended the FPI rules.