INDIA: SEBI publishes FAQs on Foreign Portfolio Regulations

Tuesday November 4 2014

The Securities and Exchange Board of India has published an FAQs document on the SEBI (Foreign Portfolio Investors) Regulations, 2014, which entered into effect in June 2014.

A foreign portfolio investor must be registered and approved as an FPI by a designated depository participant on behalf of the Securities and Exchange Board of India. No single FPI or investor group can hold more than 10% of the total issued capital of a company. The aggregate FPI limit is 24% (20% for public sector banks); however, the foreign shareholding limit can be increased by a company to the Sectoral Cap / Statutory Ceiling subject to shareholder approval and industry wide maximum foreign shareholdings limits. There are also caps on investment in corporate and government debt – USD $51bn on investment in corporate debt, and USD 30bn in government debt, both subject to certain conditions.

The FAQs cover the following:

• Transition from FII to FPI Regime
• Transition from QFI to FPI Regime
• Eligibility of FPIs
• Role and Responsibilities of Designated Depository Participant (DDP)
• Generation of FPI registration certificate
• Payment of Fees by FPI
• Clubbing of Investment Limits
• FPI Investments in Debt Securities
• Offshore Derivative Instruments (ODIs)
• Replies to Additional Queries received from DDPs

Click on the above link for more details.