INDIA: Eligibility Conditions for Foreign Portfolio Investors (FPIs) Published

Wednesday September 26 2018

On 21 September 2018, the Securities and Exchange Board of India (SEBI) published Circular P/132/2018 on eligibility conditions for foreign portfolio investors (FPIs).

After considering the interim recommendations of the SEBI Working Group on Know Your Client (KYC) requirements for FPIs, SEBI decided that Beneficial ownership criteria in Prevention of Money-laundering (Maintenance of Records) Rules, 2005 (PMLA Rules) should be made applicable for the purposes of KYC and not for determining eligibility of FPIs.

The clubbing of investment limit for FPIs should not be done on the basis of beneficial owner (BO) as per PMLA Rules. Accordingly, there will be a separate set of norms for determining conditions where non-resident Indians (NRIs) and Overseas Citizens of India (OCIs) and Resident Indians (RIs) are constituents.

The Circular outlines the conditions under which NRIs / OCIs / Resident Indians (RIs) shall be allowed to be constituents of FPIs.

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