Eligibility criteria for qualified depository participant
Summary
This circular amends the eligibility criteria for SEBI registered Depository Participants to act as qualified Depository Participants for Qualified Foreign Investors. It establishes specific financial and operational requirements, including a minimum net worth of Rs. 50 crore and prior SEBI approval. Additionally, it revises the maximum retention period for QFI funds in single rupee pool accounts to five working days.
Text
On a review, it has been decided to amend the eligibility criteria for a SEBI registered DP to act as a qualified Depository Participant.
DP shall have net worth of Rs. 50 crore or more;
DP shall be either a clearing bank or clearing member of any of the clearing corporations;
DP shall have appropriate arrangements for receipt and remittance of money with a designated Authorised Dealer (AD) Category - I bank;
DP shall demonstrate that it has systems and procedures to comply with the FATF Standards, Prevention of Money Laundering (PML) Act, Rules and SEBI circulars issued from time to time; and
DP shall obtain prior approval of SEBI before commencing the activities relating to opening of accounts of QFI.
In order to maintain consistency in the maximum retention period of QFI’s fund in the single rupee pool bank account for investments/ re-investment out of redemption or dividend in schemes of Indian mutual funds vis-à-vis equity shares, it has been decided to amend clause(s) 4.7.5 and 4.7.7 of circular Cir/IMD/DF/14/2011 dated August 9, 2011.
Accordingly, the maximum retention period of QFI’s funds in the single rupee pooled account with the qualified depository participant as envisaged in clause(s) 4.7.5 and 4.7.7 of circular dated August 9, 2011 stands revised to five working days... for both investment as well as re-investment out of redemption proceeds in schemes of Indian mutual funds.
Further, in partial amendment to clause 4.7.8, it has been decided to allow credit of dividend payments to QFIs on account of investment in schemes of Indian mutual funds held by them to the single rupee pool bank account subject to the condition that in case dividend payments are credited to the single rupee pool bank account, they shall be remitted to the designated overseas bank accounts of the QFIs within five working days...
Source: SecMarx — Eligibility criteria for qualified depository participant. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.