The Securities & Exchange Board of India (SEBI) is likely to adopt a slew of measures aimed at easing foreign fund inflows, including creation of an umbrella class of investors that will wipe out the separate category for FIIs.
The proposed measures, including those suggested by a SEBI-appointed committee on rationalisation of investment routes and monitoring of foreign portfolio investments, cover a simplified procedure for registration of all kinds of foreign investors and are aimed at attracting greater overseas inflows into Indian markets.
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The new investor class, termed foreign portfolio investors (FPIs), will subsume the present categories of foreign institutional investors (FIIs), their sub-accounts and qualified financial investors (QFIs), an official familiar with the development told The Economic Times.
Another key proposal involves single overseas investments of more than 10% in a company being classified as Foreign Direct Investment and those less than 10% as foreign portfolio investment.
SEBI would also push for an overhaul of the FVCI norms that limit their investments to just nine sectors.
The market regulator is also expected to liberalise its ‘know your client’ (KYC) norms to ease fund inflows from sovereign wealth funds, foreign central banks and multilateral agencies, with a new risk-based classification that makes it much simpler to register as an FPI in India.
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By GlobalDataAccording to the proposal, all other foreign investors would be clubbed under ‘high risk’ category and would require stringent checks and would not be allowed to issue offshore derivative instruments and participatory notes.
