The Securities and Exchange Board of India (SEBI) through a circular on 7 June and the Reserve Bank of India (RBI) in a circular dated 16 July have revised the investment framework for qualified financial investors (QFIs). The two circulars mainly incorporate the changes brought about by a press release from the Finance Ministry on 29 May.
Further, SEBI has provided a list of frequently asked questions with answers, which further elucidate aspects of the QFI investment framework and the regulatory regime governing QFIs.
Important changes to the QFI regime, apart from those outlined in the press release and circulars, are highlighted below:
- Those using the QFI route for investments can only use foreign direct investment as an alternative route. Other routes such as non-resident Indian, foreign institutional investor (FII), sub-account or foreign venture capital investor cannot be used by QFIs for investments in Indian-listed securities.
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The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
