Know Your Client Requirements for Eligible Foreign Investors

CIR/MIRSD/07/2013 · 2013-09-12 · SEBI

Summary

This SEBI circular modifies KYC requirements for eligible foreign investors investing under the Portfolio Investment Scheme (PIS). It classifies these investors into three categories based on their nature and mandates risk-based Know Your Client norms for intermediaries. The document specifies distinct documentation requirements for each category in Annexure B and applies to both new and existing clients.

Text

This circular is issued in partial modification to the provisions of circular dated September 5, 2012 regarding 'Know Your Client' requirements for foreign investors.

Eligible foreign investors investing under Portfolio Investment Scheme ('PIS') route shall be classified as Category I, II and III as provided in Annexure A.

The intermediary shall follow risk based Know Your Client norms. Accordingly, certain clarifications are hereby issued, as given in Annexure B, based on the category of these investors.

Eligible foreign investors investing under PIS route shall be subject to KYC review as and when there is any change in material information / disclosure.

The provisions of this circular are applicable for both the new and existing clients.

This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Sub Rule 14(i) of Rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.

Government and Government related foreign investors such as Foreign Central Banks, Governmental Agencies, Sovereign Wealth Funds, International/ Multilateral Organizations/ Agencies.

Appropriately regulated broad based funds such as Mutual Funds, Investment Trusts, Insurance / Reinsurance Companies... Appropriately regulated entities such as Banks, Asset Management Companies... University Funds and Pension Funds.

All other eligible foreign investors investing in India under PIS route not eligible under Category I and II such as Endowments, Charitable Societies/Trust, Foundations, Corporate Bodies, Trusts, Individuals, Family Offices, etc.

Constitutive Docs, Proof of Address, PAN Card, SEBI Registration Certificate, and KYC Form are Required for Category I and II. Financials are Exempt. Board Resolution is Exempt for Cat I but Required for Cat II.

Constitutive Docs, Proof of Address (other than POA), PAN Card, SEBI Registration Certificate, Board Resolution, and KYC Form are Required. Financial data sufficient is required on risk basis.

List Proof Of Identity, Proof of Address, and Photographs are Exempt for Senior Management in Category I and II.

Source: SecMarx — Know Your Client Requirements for Eligible Foreign Investors. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.