Markets regulator SEBI on decided to ease the entry norms for overseas investors by permitting a direct access to Foreign Portfolio Investors (FPIs) from eligible jurisdictions. After its board meeting in Mumbai, Sebi Chairman Ajay Tyagi said that the regulator has rationalised “fit and proper” criteria for FPIs as well as simplified broad based requirements for such investors.
The Securities and Exchange Board of India (Sebi) will issue a discussion paper on easing registration of FPI. He further said that the regulator has decided to expand “the eligible jurisdictions for grant of FPI registration to category I FPIs by including countries having diplomatic tie-ups with India”. Besides, it has permitted FPIs, operating under the Multiple Investment Managers (MIM) structure and holding foreign venture capital investors (FVCI) registration, to appoint multiple custodians.
Moreover Markets regulator Sebi on Wednesday sought to curb the use of participatory notes (P-Notes) by levying a fee of 1,000 US dollars each transaction and barred their issuance for non-hedging or speculative purposes.
However it ruled out a complete ban on this controversy ridden investment instrument. Briefing reporters after the board meeting, Sebi Chairman Ajay Tyagi said, the regulator is not looking at completely banning these instruments as some new investors tend to use them to test the Indian markets. He said, SEBI would want foreign investors to come directly but P-Notes also have their usefulness.
There have been demands from various political quarters to check the P-Note route, while a special investigation team on black money, constituted by the government on the Supreme Court directions, has also been asking Sebi to take steps to curtail misuse of these instruments. P-Notes have been long seen as being possibly misused for routing of black money from abroad.