Guidelines for participation/functioning of Eligible Foreign Investors (EFIs) and FPIs in International Financial Services Centre (IFSC)
Summary
This circular modifies the SEBI (IFSC) Guidelines, 2015 to facilitate the participation of Eligible Foreign Investors and FPIs in the International Financial Services Centre. It permits SEBI-registered FPIs to operate in IFSC without additional documentation and allows trading members to rely on existing due diligence processes. The document also mandates fund segregation for dual-market FPIs and updates the definition of 'intermediary' within the guidelines.
Text
SEBI registered FPIs proposing to operate in IFSC shall be permitted, without undergoing any additional documentation and/or prior approval process.
In case of participation of FPIs in IFSC, a trading member of the recognized stock exchange in IFSC may rely upon the due diligence process already carried out by a SEBI registered intermediary during the course of registration and account opening process in India.
In case of participation of an EFI not registered with SEBI as an FPI but desirous of operating in IFSC, a trading member of the recognized stock exchange in IFSC may rely upon the due diligence carried out by a bank permitted by RBI to operate in IFSC.
FPIs who presently operate in Indian securities market and propose to operate in IFSC also shall be required to ensure clear segregation of funds and securities. Custodians shall monitor compliance of this provision for their respective FPI clients.
Recognised stock exchange in IFSC shall maintain at all times the necessary details of EFIs which may be called upon by SEBI/RBI or any other authority of law.
EFIs shall abide by all the applicable Indian laws viz. Rules/Regulations/Circulars/Guidelines etc. in IFSC issued by the Government of India/RBI/SEBI or any other authority of law from time to time.
It has now been decided to delete the words “a foreign portfolio investor,” in the definition of the term “intermediary” in clause (g) of Guideline 2 (1) of the SEBI (IFSC) Guidelines.
Source: SecMarx — Guidelines for participation/functioning of Eligible Foreign Investors (EFIs) and FPIs in International Financial Services Centre (IFSC). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.