Foreign investment: RBI subsumes FII under RPFI
26 March 2014 1:11 AM GMT
‘The portfolio investor registered in accordance with Sebi guidelines shall be called Registered Foreign Portfolio Investor (RFPI),’ RBI said in a notification.
The existing portfolio investor class, namely, foreign institutional investor (FII) and qualified foreign investor (QFI) registered with Sebi shall be subsumed under RFPI, it said. The guidelines for Portfolio Investment Scheme for FIIs and QFIs have since been reviewed and it has been decided to put in place a framework for investments under a new scheme called Foreign Portfolio Investment scheme, it said.
RFPI may purchase and sell shares and convertible debentures of Indian company through registered broker on recognised stock exchanges in India as well as purchases shares and convertible debentures which are offered to public in terms of relevant Sebi guidelines, it said. Such investors ‘may also acquire shares or convertible debentures in any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by the Central Government or any State Government.’
These entities would be eligible to invest in government securities and corporate debt subject to limits specified by the RBI and Sebi from time to time, it added. However, all investments made by FII/QFI in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit.
The RBI said, such investors would be permitted to trade in all exchange traded derivative contracts on the stock exchanges in India subject to the position limits as specified by Sebi from time to time.
‘RFPI may offer cash or foreign sovereign securities with AAA rating or corporate bonds or domestic Government Securities, as collateral to the recognised Stock Exchanges for their transactions in the cash as well as derivative segment of the market,’ it said.
The existing portfolio investor class, namely, foreign institutional investor (FII) and qualified foreign investor (QFI) registered with Sebi shall be subsumed under RFPI, it said. The guidelines for Portfolio Investment Scheme for FIIs and QFIs have since been reviewed and it has been decided to put in place a framework for investments under a new scheme called Foreign Portfolio Investment scheme, it said.
RFPI may purchase and sell shares and convertible debentures of Indian company through registered broker on recognised stock exchanges in India as well as purchases shares and convertible debentures which are offered to public in terms of relevant Sebi guidelines, it said. Such investors ‘may also acquire shares or convertible debentures in any bid for, or acquisition of, securities in response to an offer for disinvestment of shares made by the Central Government or any State Government.’
These entities would be eligible to invest in government securities and corporate debt subject to limits specified by the RBI and Sebi from time to time, it added. However, all investments made by FII/QFI in accordance with the regulations prior to registration as RFPI shall continue to be valid and taken into account for computation of aggregate limit.
The RBI said, such investors would be permitted to trade in all exchange traded derivative contracts on the stock exchanges in India subject to the position limits as specified by Sebi from time to time.
‘RFPI may offer cash or foreign sovereign securities with AAA rating or corporate bonds or domestic Government Securities, as collateral to the recognised Stock Exchanges for their transactions in the cash as well as derivative segment of the market,’ it said.
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