The Securities and Exchange Board of India (SEBI) on 31 December 2018 came out with SEBI (Foreign Portfolio Investors) (Third Amendment) Regulations, 2018. The third amendment regulations have amended regulation 23(3) of the FPI Regulations to treat multiple entities having direct or indirect common ownership of more than 50% or common control as part of the same investor group. The investment limits of all such entities will be clubbed with the investment limit applicable to a single FPI.
A “government agency” has been defined as an entity in which more than 75% of ownership or control is held by the government of a foreign country. SEBI has also inserted a new provision, which states that the FPI applicant or an existing FPI and their underlying investors contributing 25% or more in the corpus of such applicant or existing FPI, or exercising control over such FPI, should not be a person mentioned under the United Nations Security Council’s sanctions list.