SEBI Mulls Framework To Boost Resident Indians Participation In FPIs

Markets regulator Sebi has proposed facilitating greater participation of resident Indians in the Foreign Portfolio Investors framework.

Under the proposal, Sebi has proposed expanding the role of Indian non-individuals and mutual funds in international investment structures.

"It is proposed to enable retail schemes based in IFSCs in India with resident Indian non-individuals as sponsor/manager to register as FPIs," Sebi said in its consultation paper.

The regulator has suggested that allowing retail schemes based in International Financial Services Centres with resident Indian non-individuals as sponsors or managers can be registered as FPIs.

Also, Sebi proposed that the term 'sponsor or manager' for IFSC-based FPIs may be replaced with 'Fund Management Entity or its associate'.

Resident Indian non-individuals as FME or its associate in AIFs and retail schemes in IFSCs may contribute up to 10% of the fund’s corpus or assets under management for retail schemes.

Overseas mutual funds/unit trusts registering as FPIs may be allowed to include Indian mutual funds as constituents.

Under FPI Regulations, non-resident Indians NRI, overseas citizens of India OCI or resident Indians are not eligible to register as FPIs. However, they are permitted to be constituents of FPIs subject to certain conditions in terms of limits on contribution and control of the FPIs. Further, resident Indian non-individuals are permitted to be constituents of an FPI, subject to certain conditions and investment limits.

The Securities and Exchange Board of India has sought public comments till August 29 on the proposals.