The Securities and Exchange Board of India (SEBI) issued clarifications in respect to investments by certain category II foreign portfolio investors (FPIs), through a circular on 13 March.
The clarifications relate to amendments made on 15 February to the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, in order to ease access norms for FPIs in Indian markets.
Private and merchant banks. Collective investment vehicles of private banks or merchant banks investing on behalf of their clients must now ensure that the investor has fulfilled the applicable know your customer norms. The beneficial owners of the investor are identified in accordance with applicable anti-money laundering laws. The investor or their beneficial owners should not be an Indian resident, a non-resident Indian or an overseas citizen of India.
The investor also must not be resident in in a country identified in the public statement of the Financial Action Task Force as: (1) a jurisdiction having strategic anti-money deficiencies to which countermeasures apply; or (2) a jurisdiction that has not made sufficient progress in addressing deficiencies, or has not committed to an action plan developed with the Financial Action Task Force to address deficiencies.
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The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bengaluru, Singapore, Silicon Valley, Munich and New York. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.
