SEBI Notifies Norms for Portfolio Investors

The Foreign Portfolio Investor (FPI) Regulations formed on the recommendations of the K.M. Chandrasekhar Committee on rationalising investment routes and monitoring foreign portfolio investments has been notified.

The regulations merge foreign institutional investors, sub-accounts and qualified foreign investors into a single investor class called FPI. SEBI has decided to do away with prior direct registration of FIIs and sub-accounts. This would be done by designated depository participants authorised by the regulator and would be subject to know-your-client compliance.

FPIs have been divided into three categories. They would receive the same tax treatment as FIIs.

FIIs and QFIs that are already registered would be deemed to be FPIs until their registration expires. FIIs are allowed to buy and sell securities on payment of conversion fees till either the their FII/sub account registration expires or a certificate of registration as FPI is obtained. However, QFIs have been given one year to re-register as FPIs. 

Business Line, New Delhi, 09-01-2014