Funds

Post the Circular CIR/ IMD/ FPIC/ CIR/ P/ 2018 titled ‘Know Your Client Requirements for Foreign Portfolio Investors (FPIs)’ issued by Securities Exchange Board of India (SEBI) dated 10 April 2018 (SEBI Circular), there was widespread confusion around the eligibility of Resident Indians (RI), Non-Resident Indians (NRI), Overseas Citizens of India (OCI)  and Persons of Indian Origin (PIO) to hold interests in Foreign Portfolio Investors (FPIs) and invest in FPIs.

This is with reference to our newsflash titled “NRIs: Not Really for Indians? SEBI tightens FPI Norms” dated 17 April 2018 (Newsflash). The Newsflash analysed the Securities and Exchange Board of India (SEBI) circular dated 10 April 2018 (SEBI Circular), which disallowed Indian / Non-resident Indians from being beneficial owners of a Foreign Portfolio Investor (FPI) and clarified the position on clubbing of investments limits. The SEBI Circular provided a period of 6 months to registered FPIs from the date of the SEBI Circular,

The Reserve Bank of India (RBI) vide circular dated 16 November 2015 had permitted foreign direct investment (FDI) in investment vehicles, i.e., any entity registered and regulated by Securities and Exchange Board of India (SEBI), including alternative investment funds (AIFs), real estate investment trusts (REITs)

The Securities and Exchange Board of India (SEBI) vide two circulars dated 10 April 2018 introduced certain changes in the Know Your Clients (KYC) requirements for Foreign Portfolio Investors (FPI) and clarified its stance with respect to clubbing of investment limits of foreign Government or their related entities. The salient features of the revised KYC requirements for FPIs and clubbing of the investments by foreign Governments or their related entities has been analysed in Part I and Part II of this article, respectively.

The Reserve Bank of India (RBI) vide circular numbered RBI/2018-19/226 (FLA Circular) issued on 28 June 2019, introduced a web-based online reporting portal for submission of return on foreign liabilities and assets (FLA) in an effort to enhance the security level in data submission and further improve the data quality.

Following the proposals put forward by the Union Minister of Finance and Corporate Affairs in the Union Budget 2019-20 (Budget), we take a look at some of the key takeaways which have the potential to deeply impact the investment funds industry in India.