Millennium Post

Sebi to amend existing regulations to usher in FPI regime

Sebi has decided to amend at least five key regulations, including those for listing disclosures, takeovers and market intermediaries, to bring into effect its new FPI norms that aim to ease operating framework for foreign investors in Indian capital markets.

The capital markets regulator is currently in the process of notifying the foreign portfolio investors (FPI) Regulations, 2013, which clubs different classes of foreign investors into a new class called foreign portfolio investors and overhauls the way they register and operate in India.

To further facilitate the operationalising of this new regulation, Sebi has decided to carry out necessary amendments to at least five of its other existing regulations, a senior official said, while adding that the process to amend these norms have been initiated and could be completed soon.

These include the Sebi (issue of capital and disclosure requirements) regulations, Sebi (substantial acquisition of shares and takeovers) regulations, Sebi (depositories and participants) regulations, Sebi (intermediaries) regulations and Sebi (mutual funds) regulations.

Necessary amendments can be carried out in other regulations at a later stage, if required, the official said.

The new FPI regulations have been framed at a time when concerns are being raised about the policy and operating framework for foreign investors in India.

These norms have been finalised as per recommendations made by a Committee on Rationalisation of Investment Routes and Monitoring of Foreign Portfolio Investments, chaired by former Cabinet secretary K M Chandrasekhar.

Under the new FPI Regulations, which were approved by Sebi's board earlier this month and would be notified soon, various investor classes like FIIs (foreign institutional investors) and QFIs (qualified foreign investors) would be clubbed into one single category to be known as foreign portfolio investors.

To make it easier for FPIs to invest in Indian markets, the new norms also provide for a permanent registration to them, while Sebi has also exempted the lowest-risk foreign investors (such as government entities, sovereign funds and multilateral agencies) from any registration fees.

The new norms come at a time when concerns are being raised about flight of overseas funds away from Indian markets, which was known as among the most attractive investment destinations across the world till a few years ago.

The regulations governing foreign investors have been streamlined to make Indian market a more attractive investment destination and include easier entry norms and cost-effective operational framework for the foreign entities.

The foreign portfolio investors would be allowed to invest across a host of the capital market segments, including in shares, debentures, warrants, mutual funds, collective investment schemes, derivatives, treasury bills and government securities.
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