Clarification on grant of registration as a Foreign Portfolio Investor (FPI) to Registered Foreign Venture Capital Investors (FVCI)
Summary
This circular clarifies that Registered Foreign Venture Capital Investors (FVCIs) are permitted to obtain registration as Foreign Portfolio Investors (FPIs). It mandates strict segregation of funds, securities, and reporting mechanisms for entities holding both registrations. The authorization is exercised under Section 11(1) of the SEBI Act to protect investor interests.
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The SEBI (Foreign Portfolio Investors) Regulations, 2014... do not expressly prohibit FVCI from holding registration as a FPI.
such an entity would be required to have a clear segregation of funds/ securities which are proposed to be invested / held under the respective registrations.
The applicant complies with the eligibility criteria as prescribed under the FPI Regulations.
The funds raised, allocated and invested must be clearly segregated for both the registrations.
Separate accounts must be maintained with the custodian for execution of trades. However, such an applicant shall have same custodian for its activities as FPI and FVCI.
The securities held under FVCI and FPI registrations should be clearly segregated.
Reporting of transactions must be done separately according to the conditions applicable under the specific registration.
All the conditions applicable to the entity under the respective registrations must be complied with at the level of the segregated funds and activities with respect to the specific registrations.
The investment restrictions as applicable to FPI, in terms of Regulation 21 of FPI Regulations and SEBI Circular No. CIR/IMD/FIIC/20/2014 dated November 24, 2014 shall be applicable.
The applicant does not have opaque structure(s), as defined under Explanation 1 of Regulation 32(1) (f) of FPI Regulations.
The applicant shall be required to comply with the provisions of FPI Regulations, FVCI Regulations and the circulars etc., issued there under from time to time.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Clarification on grant of registration as a Foreign Portfolio Investor (FPI) to Registered Foreign Venture Capital Investors (FVCI). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.