Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors
Summary
This section introduces the Master Circular for Foreign Portfolio Investors, Designated Depository Participants, and Eligible Foreign Investors, superseding previous operational guidelines. It establishes that rescinded circulars remain valid for past actions, pending applications, and accrued liabilities to ensure legal continuity. The circular is issued under Section 11(1) of the SEBI Act, 1992, and provides access via the SEBI website. This section outlines the guidance for Depositary Participants in processing Foreign Portfolio Investor applications using the Common Application Form. It details specific eligibility checks including country verification against international bodies and restrictions on NRI/OCI contributions to applicant corpus. The text further mandates fit-and-proper person assessments and Category I FPI verifications during the registration process. This section outlines specific due diligence checks for FPI applicants, including regulatory status verification and handling of past regulatory actions. It provides guidance for specific entity types such as banks, insurance entities, pension funds, and appropriately regulated entities investing on behalf of client
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SEBI had issued Operational Guidelines (OG) for FPIs, DDPs and Eligible Foreign Investors under the Securities and Exchange Board of India (Foreign Portfolio Investors), Regulations 2019, with further guidelines issued through various circulars.
The provisions of earlier circulars are incorporated in this Master Circular which supersedes the earlier OG; circulars mentioned in Annexure A shall stand rescinded, while specific directions applicable to FPIs continue in force.
Anything done or any action taken including registration, approval, fees collected, adjudication, enquiry or investigation commenced under the rescinded circulars prior to rescission shall be deemed to have been done under this Master Circular.
Any application made to the Board under the rescinded circulars, prior to such rescission, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular.
The previous operation of the rescinded circulars, rights, privileges, obligations, liabilities, penalties incurred, and investigations or legal proceedings shall remain unaffected as if the rescinded circulars have never been rescinded.
This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992.
The Government of India vide notification number F. No. 4/15/2016-ECB dated January 27, 2020 notified the Common Application Form (CAF) for the purpose of (a) registration of Foreign Portfolio Investors (FPIs) with Securities and Exchange Board of India (SEBI), (b) allotment of Permanent Account Number (PAN) and (c) carrying out of Know Your Customer (KYC) for opening of Bank and Demat Account.
FPI applicant shall submit duly filled prescribed application form – CAF and ‘Annexure to CAF’ (Annexure B) supported by required documents and applicable fees for SEBI registration and issuance of PAN. The application form should be duly signed with all signatures in original.
Where the application form is incomplete, or lacks clarity, the applicant shall be advised by the DDP to clarify or furnish the desired information within a reasonable time.
DDP may satisfy itself on any incremental due diligence requirement to process the application under the Regulation. The other intermediaries dealing with FPIs may rely on the information in CAF for the purpose of KYC.
List of countries where the securities market regulator is a signatory to IOSCO MMOU shall be verified by the DDP from website of International Organization of Securities Commissions (IOSCO).
Where NRIs or OCI or RIs are constituents of the applicant – a. the contribution of a single NRI or OCI or RI shall be below twenty-five percent of the total contribution in the corpus of the applicant; b. the aggregate contribution of NRIs, OCIs and RIs shall be below fifty percent of the total contribution in the corpus of the applicant.
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Source: SecMarx — Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.