Sebi Update

Dear Reader,

Foreign portfolio investors will breathe a sigh of relief after a Securities and Exchange Board of India (SEBI) appointed panel to recommend easing some of the restrictions the regulator had imposed on investments by non-resident Indians and some foreign funds. The committee suggested that NRIs should be allowed to manage funds and have relaxed rules that would have limited their investments in the country.

SEBI had earlier issued a circular that barred NRIs and persons of Indian origin from being a beneficial owner in funds that invest in India. FPIs (Foreign Portfolio Investors) raised a hue and cry over the circular saying SEBI should use the beneficial owner definition for greater disclosures but not to curb investments. The directive rattled Indian groups like Kotak and Edelweiss which had set up FPI (Foreign Portfolio Investors) vehicles abroad.

If these suggestions go through, an NRI will be allowed to invest up to 25 per cent of a foreign fund’s assets. Collectively, NRIs could hold up to 50 per cent. Committee also recommended doing away with the restriction that Persons of Indian Origin cannot be beneficial owners in a foreign fund. It also recommended that the government and SEBI should come out with a proper definition for ‘high-risk jurisdictions’.

Source Economic Times