Germany – BaFin Issues Final Positions Limits MiFID

On 19 July 2018, GE BaFin issued final position limits, taking effect on 20 July 2018.

  • Italian power future (peak), Panamax-TC-Freight Future, Panamax-TC-Freight Option.
  • There were no changes from the draft position limits which were issued in June 2018.
  • Italian power: 5,340,219 MWh for spot month, 1,045,510 MWh for the other months.
  • Panamax: fixed at 4,049 lots for the spot month and 4,049 lots for the other months.

India – SEBI Primary Investment By FPI

On 13 July, SEBI updated investment by FPIs in primary issuance.

  • SEBI (FPI) Regulations, 2014 mandates that purchase of equity shares of each
    company, by single FPI or group, shall be below 10% of the total issued capital.

Beneficial Owners

  • Rule 23(3) of FPI Regulations requires if same set of ultimate beneficial owners
    invest through multiple entities, they will be treated as part of the same group.
  • Investment limits of such entities are clubbed at investment limit as single FPI.
  • For purpose of identifying investor group, the designated depository participant
    shall obtain details provided by FPI under clause 2.2 of the FPI application form.
  • Monitoring investment limits at group level, done by depositories based on this.

Compliance Process

  • At time of finalized basis of allotment in primary market issuance, registrar and
    transfer agents, use a permanent account number (PAN) issued by Income Tax
    Department of India for checking compliance of single foreign portfolio investor.
  • Obtain validation from depositories for the foreign portfolio investors who have
    invested in particular primary market issuance, to ensure is no breach of limits.
  • Depositories put in place the necessary systems for sharing of information with
    RTAs in timelines for issue procedures, as prescribed by SEBI from time to time