FPI onboarding process expedited

FPI onboarding process expedited

The Securities and Exchange Board of India (SEBI) has permitted authorised bank officials to use the Swift mechanism for certification of copies of original documents submitted by foreign portfolio investors (FPIs), “in order to ease the onboarding process of FPIs and reduce the time taken for granting registration and opening of demat, trading and bank accounts of FPIs”.

The SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2023, notified on 14 March aims to simplify the onboarding process for FPIs and accelerate the process of granting registration, as well as opening of demat, trading and bank accounts for FPIs.

An FPI applicant can now submit its unique FPI investor group ID in the common application form, if it belongs to an existing FPI investor group, rather than providing details of all group constituents. If the applicant wants to include additional FPIs in such a unique investor group ID, it only needs to provide details of those additional FPIs along with the investor group ID.

Currently, at the time of registration, an FPI applicant must provide details of FPIs with whom it shares ownership of more than 50%, or common control. Depositories in turn generate a unique FPI investor group ID for each such FPI investor group.

The SEBI’s board approved the simplification of certain procedural requirements for onboarding of FPIs in December 2022, and the circular regarding the above-mentioned changes will be applicable immediately.