2,200 fresh FPIs register with Sebi in first 10 months of FY16

Volatile markets notwithstanding, more than 2,200 new Foreign Portfolio Investors (FPIs) registered with regulator Sebi in the first 10 months of the ongoing fiscal. According to the latest data from Securities and Exchange Board of India (Sebi), the capital markets had witnessed 1,444 newly registered FPIs in the entire fiscal 2014-15.

A total of 2,214 additional FPIs got approval from Sebi during April-January, taking the total number of such investors to 3,658, analysis of the data showed. FPIs have pulled out over Rs 25,000 crore from stock markets in the current fiscal after pumping in a staggering Rs 1.11 lakh crore in the entire 2014-15.

In a major revamp, Securities and Exchange Board of India (Sebi) in 2014 had released norms that had clubbed different categories of foreign investors into a new class called FPIs. Under the new regime, FPIs have been divided into three categories as per their risk profile and the KYC (know your client) requirements, while other registration procedures have been made simpler for them.

FPIs are granted a permanent registration, as against the earlier practice wherein approvals were granted for one year or five years to the overseas entities seeking to invest in Indian markets. The registration remains permanent unless suspended or cancelled by the board or surrendered by the FPI. Meanwhile, according to the data, the number of ‘deemed FPIs’ stood at 5,003 during first 10 months of the current fiscal . The number of such investors totalled 6,772 in the previous fiscal.

FPIs (including deemed FPIs) from about 55 different jurisdictions are registered with Sebi.  Meanwhile, after BSE, the NSE has put in place a graded penalty mechanism with fines starting from Rs 10,000 for brokers who fail to make timely submission of risk-based supervision data, and prolonged non-compliance will result in disablement of trading terminals.

The exchange introduced a new risk-based model for supervision of market entities, following Sebi’s directions. Trading members have been submitting risk-based supervision (RBS) data since 2013-14. However, there have been instances of delayed or non-submission of data.

Accordingly, the exchanges in consultation with Sebi have formulated a standard penalty structure for the non/delayed submission of RBS data, which will be applicable from March 31, 2016 submission and onwards. Earlier this week, BSE has put in place a graded penalty mechanism in this regard. In a circular, National Stock Exchange (NSE) said brokers will have to submit RBS data for the fiscal ending March 31, by May 15, while for half year ending September 30, the last date will be November 15. Submission of information within 5 days from required timeline will not attract any penalty. However, a fine of Rs 10,000 will be imposed in case brokers make the submission after 5 days but within 15 days. The exchange will levy a fine of Rs 10,000, in addition to Rs 2,000 per day for submissions made after five days but within 15 days. The trading member will not be allowed to register any new clients in exchange UCC (Unique Client Code) database in case of non-submission of data even after 15 days. This will be implemented across the exchanges, even if data is submitted to one bourse.