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Sebi eases Foreign Portfolio Investors onboarding process

Sebi,

To make doing business easier and speed up the registration process for Foreign Portfolio Investors (FPIs), market regulator SEBI has simplified the onboarding procedures.

According to a Monday circular, the regulator permitted designated depository participants (DDPs) to grant FPI registration on the basis of scanned copies of application forms and supporting documents.

Scanned copies are acceptable for registration, but physical documents must be verified before the company can be activated.

In order to obtain FPI registration, applicants are currently required to send scanned copies of the application forms to the DDP along with physical documents and supporting documents.

In addition, the Securities and Exchange Board of India (SEBI) has allowed DDPs to accept FPIs using digital signatures to sign registration-related documents.

In addition, the regulator has permitted DDPs to verify their PAN through the Common Application Form (CAF) module, which can be found on depositories’ websites. At the moment, DDPs can only verify PAN if they receive a hard copy from the applicant.

SEBI has allowed authorized bank officials to use the SWIFT mechanism to certify copies of original documents submitted by FPIs in order to speed up the physical movement of documents and registration.

According to Sebi, these measures aim to speed up FPIs’ onboarding, expedite registration, and shorten the time it takes to open demat, trading, and bank accounts.

SEBI stated that an FPI applicant who is a member of an existing FPI investor group may submit his unique FPI investor group ID to the CAF instead of providing complete information about all group members for operational convenience.

The FPI must provide the details of any additional FPIs in addition to the Investor Group ID if the applicant wishes to include additional FPIs in the same unique Investor Group ID.

At the time of registration, an FPI applicant is required to provide information about FPIs with which it shares ownership or common control of more than 50%. To identify each FPI Investor Group, depositories generate a unique FPI Investor Group ID.

After Sebi’s board meeting in December 2022 approved simplifying certain on-boarding procedures for FPIs, the circular, which takes effect immediately, was issued.

Sebi issued stricter guidelines for FPIs earlier this month, requiring them to report any significant changes in their composition and common ownership within seven working days.

As for new FPI enlistment, the controller might ask them for any extra records that might be required.

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