On 21 February 2020, the Financial Action Task Force (FATF) issued a list of ‘jurisdictions under increased monitoring’, popularly known as the ‘grey list’ and to the dismay of several foreign portfolio investors (FPIs), Mauritius ended up featuring in this list alongside 17 other jurisdictions, for the first time.
While Budget 2019-20 was welcomed in India Inc, the potential impact of the announcement regarding the increase in surcharge applicable to ‘individuals’ (with income exceeding Rs 2 crore) was only realised upon reading the fine print.
There has been a lot of ambiguity on whether a foreign portfolio investor (FPI) registered under the SEBI (Foreign Portfolio Investor) Regulations 2019 (FPI Regulations) can make investments in unlisted equity shares of an Indian company under the foreign direct investment (FDI) route specified under Foreign Exchange Management (Transfer or Issue of Security in Person Resident outside India) Regulations 2017 (FEMA 20), which have now been superseded by the Foreign Exchange Management (Non-debt instruments) Rules 2019 (FEMA NDI Rules).
With a move that will mark a further evolution of the comparatively young alternative investment fund (AIF) industry, the Securities and Exchange Board of India (SEBI) released “Consultation Paper on Introduction of Performance Benchmarking and Standardization of Private Placement Memorandum for Alternative Investment Funds” (Consultation Paper) on 4 December 2019. The primary objective of the Consultation Paper is to bring more uniformity and transparency in the AIF industry.
The Securities and Exchange Board of India has gone the whole hog in revamping the FPI regime with the introduction of the Foreign Portfolio Investor Regulations, 2019. This followed relief in the form of rollback of the super-rich tax that had spooked foreign portfolio investors (FPIs).
The Ministry of Finance on 17 October 2019, released the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (NDI Rules) in supersession of the Foreign Exchange Management (Transfer of Issue of Security by a Person Resident outside India) Regulations, 2017 (TISPRO Regulations) and the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2018.
The development of the International Financial Service Centre (IFSC) has been gaining significant momentum after a relatively sluggish start. Not only has there been critical mass in terms of number of players taking to it, but also the regulators have shown enough motivation to make this concept of an onshore IFSC successful.
2018 has been a tumultuous year for Foreign Portfolio Investors (FPIs) with each quarter bringing about significant changes in their investment regime. Arguably, the clubbing of their investment limits has wreaked the most havoc of all such changes.
India has witnessed an unprecedented growth in the domain of investment funds, at a global level. The Indian fund legal and regulatory regime has exhibited dynamic promptitude in accommodating a wide variety of investors and fund managers. Owing to such conducive investment conditions, there has been an increase in fund raising activity in India over the period of time. While most of the investment funds raising capital from offshore investors have typically been established in offshore financial hubs such as Singapore, Hong Kong, Mauritius, Cayman Islands etc.
With the FPIs on tenterhooks since the issuance of the now famous, or rather infamous, circular dated 10 April 2018 (April 10 Circular), following the submission of the report[1] by the working group under the Chairmanship of Shri H R Khan (Working Group) and in-principle acceptance of their recommendations by the SEBI Board, SEBI has finally issued two important circulars on 21 September 2018. Vide the two separate circulars, one dealing with Know Your Client (KYC) requirements and the second with the eligibility conditions for Foreign Portfolio Investors (FPIs), SEBI has substantially su
