BNP Paribas Settles FPI Licence Violation Case With SEBI For Nearly Rs 40 Lakh

BNP Paribas has settled an adjudication proceeding with the Securities and Exchange Board of India over the violation of foreign portfolio investor norms by remitting a settlement amount of Rs 39.98 lakh to the market regulator.

The final settlement order, as released by SEBI on Nov. 11, brings closure or the final settlement to the proceedings initiated against the entity, which was acting as a designated depository participant. The firm faced a show cause notice issued in February 2025 for alleged non-compliance with multiple provisions under both the SEBI (FPI) Regulations, 2014, and the updated FPI Regulations, 2019.

The core of the alleged violations, as detailed in the SEBI order, is centered on improper diligence in the categorisation and registration of certain FPIs.

Specifically, the proceedings involved granting a Category II licence to six FPIs that were deemed ineligible under the 2014 regulations. Further, the firm was cited for failing to correctly identify that these same six FPIs were not regulated by the UK-FCA and subsequently incorrectly re-categorising them as Category I under the 2019 framework.

A separate allegation involved granting Category I registration to a distinct FPI that was also allegedly ineligible under the newer rules.

By filing a settlement application, BNP Paribas was able to resolve the matter "without admitting or denying the findings of facts and conclusions of law, through a settlement order".

The proposed settlement amount, which was in line with the sum computed by SEBI’s Internal Committee. A lower settlement of Rs 29,25,000 was requested for consideration by the company but denied.

The settlement amount was recommended by the high powered advisory committee on July 24, and approved by the panel of whole time members in September 2025.

With the settlement amount received, SEBI disposed of the proceedings under Section 15JB of the SEBI Act.