INDIA: Clarification on grant of registration as a Foreign Portfolio Investor to Registered FVCI

Tuesday June 16 2015

The Securities and Exchange Board of India (SEBI) has released a circular concerning the grant of registration as a Foreign Portfolio Investor (FPI) to Registered Foreign Venture Capital Investors (FVCI). This was in response to a query from a Designated Depository participant (DPP) seeking clarification with regard to any restrictions/conditions on applicants, holding registration as a FVCI, from obtaining registration as a FPI.

The essence is as follows:

The SEBI Regulations 2014 as well as the SEBI Regulations 2000 do not expressly prohibit FVCI from holding registration as a FPI.

It is clarified that a DPP may consider an applicant, holding FVCI registration, for grant of registration as an FPI subject to meeting certain criteria including: the applicant complies with the eligibility criteria as prescribed under the FPI Regulations; the funds raised, allocated and invested must be clearly segregated for both the registrations; separate accounts must be maintained with the custodian for execution of trades; the securities held under FVCI and FPI registrations should be clearly segregated.

The applicant shall be required to comply with the provisions of FPI Regulations, FVCI Regulations and the circulars etc., issued there under from time to time.

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