India – SEBI Foreign Portfolio Investors

India – SEBI Foreign Portfolio Investors

On 31 December 2018, SEBI amended rules on foreign portfolio investors.

  • Called SEBI (foreign portfolio investors) (third amendment) regulations, 2018.
  • They will come into force on the date of their publication in the official gazette.
  • New amendments add clauses, explanations, including certain sub-regulations.
  • Control Definition
  • Control includes right to appoint majority of directors, or control management or policy decisions exercisable by persons acting either individually or concert.
  • By shareholding or management rights, voting agreement or another manner.
  • New clause for 'investment manager' means an entity performing such a role.
  • Where non-resident Indians are constituents of foreign portfolio investor, the contribution of a single non-resident, shall be below 25% of total contribution.
  • Aggregate contribution of non-resident shall be below 50% of the contribution.
  • Contribution by Residents
  • Contribution of resident Indian allowed if liberalised remittance scheme (LRS), if approved by RBI in global funds, whose Indian exposure remains under 50%.
  • As long as non-resident Indians, overseas citizens of India and resident Indians are not in control of the applicant or of the existing foreign portfolio investor.