Framework for providing flexibility to Foreign Portfolio Investors in dealing with their securities post expiry of their registration
Summary
This circular amends the FPI Master Circular to provide flexibility for Foreign Portfolio Investors in dealing with securities after their registration expires. It introduces a 30-day window for reactivation upon payment of late fees and allows disposal of holdings during this period without fresh purchases. If securities remain unsold after an additional 180-day disposal period, they are deemed compulsorily written off. Paragraph 18 outlines the disposal timeline for securities held by FPIs with expired registration, allowing sales within 180 days without penalty and an additional 180-day period with a 5% financial disincentive. Paragraph 19 mandates that written-off securities be transferred to escrow accounts operated by empanelled brokers for subsequent sale, with proceeds remitted to the IPEF. The circular specifies reporting obligations for custodians and stock exchanges, with most provisions effective immediately while new operational mechanisms have a 60-day implementation window.
Text
FPI shall provide additional information... at least 15 days prior to current validity of its registration...
no further purchases may be permitted until intimation of continuance is given by DDP.
permitted to pay the same along with a late fee and re-activate its registration within a period of 30 days from the date of such expiry.
permitted to dispose the securities held in its account during the period from expiry of registration till re-activation of registration.
no fresh purchases of securities shall be permitted from expiry of registration till re-activation of registration.
its FPI registration shall cease to be valid after the date, up to which, the last registration fees were duly paid by the FPI.
DDPs shall send suitable reminders to their respective FPI clients for renewal of registration well in advance of such expiry.
permitted to dispose the securities held in its account within 180 days from the expiry of the prescribed 30 days’ time period for reactivation of registration.
till the expiry of the aforementioned 180-day period the monetary/non-monetary corporate benefits/voting rights... shall continue to accrue to the FPI.
shall not allow such FPI to make fresh purchases till additional KYC requirements... are complied with. However, such FPI shall be allowed to continue to sell... until expiry of its existing registration block or 180 days... whichever is later.
Custodian shall not allow such FPIs to make fresh purchases until the jurisdiction/FPI is compliant... allowed to sell... until expiry of its existing registration block or 180 days... whichever is later.
custodian shall not allow any further buy/sell... and shall as soon as possible but not later than two working days notify such instances to SEBI.
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Source: SecMarx — Framework for providing flexibility to Foreign Portfolio Investors in dealing with their securities post expiry of their registration. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.