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The Securities and Exchange Board of India (SEBI) on 27 March 2023 issued a circular (Circular) to simplify the procedural requirements for onboarding and registration of Foreign Portfolio Investors (FPIs) by designated depository participants (DDPs), and to reduce the time taken for grant of registration to FPIs. We have summarised below the key changes introduced by the Circular:
(a) Registration on the basis of scanned documents: Pursuant to the Circular, an FPI applicant may submit scanned copies of the application forms and other supporting documents to the DDPs for obtaining an FPI registration, and the registration may be granted on the basis of such scanned copies. However, the FPI shall only be permitted to transact in the securities market after the DDP has received and verified the physical documents.
(b) Digital signatures by FPIs: FPIs have been permitted to use digital signatures that comply with the requirements prescribed under the Information Technology Act, 2000, for the purpose of execution of the application forms and other registration related documents.
(c) Certification of copies of original documents using SWIFT mechanism: SEBI has allowed authorised bank officials of multinational foreign banks and banks regulated by Reserve Bank of India (RBI), to use the SWIFT mechanism to certify copies of original documents submitted by FPIs to the DDPs. This shall be in addition to the existing mechanism of attestation of copies of documents by notary publics, and officials of multinational foreign banks or banks regulated by the RBI.
(d) Submission of unique investor group ID by FPI: FPI applicants which are a part of an existing FPI investor group that is registered with SEBI, will no longer be required to provide details of all constituents of its group at the time of making the application, and only the unique FPI investor group ID may be provided instead.
The above procedural relaxations had been approved by SEBI at its board meeting in December 2022, and have now been implemented. The revised procedural requirements are expected to make the onboarding of FPIs more efficient and simpler.
Please click here to read the Circular.
Authors: Deni Shah= and Tanuj Modi
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