The Securities and Exchange Board of India is set to implement several reforms aimed at improving the ease of doing business for foreign portfolio investors. Ananth Narayan, a whole-time member of SEBI, outlined these changes during a CII event on Tuesday.
Narayan mentioned that the key change is the enhancement of the T+1 settlement cycle, which has been improved to reduce error rates and expedite transaction processes. Starting Sept. 9, 2024, FPIs will benefit from accelerated fund access due to faster tax clearance, allowing them to liquidate portfolios even after the expiry of their licences.
SEBI is also developing an online tracker to monitor the progress of FPI registrations, enhancing transparency and facilitating easier tracking. Simplified application forms have been introduced to ease the registration process, particularly for new funds.
For FPIs focussing exclusively on government bonds, a faster, light-touch registration process is being devised, reflecting their inclusion in global indices. The regulator is also considering relaxed Know Your Customer (KYC) requirements and exploring digital solutions to further streamline the process.
Investment restrictions are being eased for certain FPIs, while detailed disclosure requirements are being enforced to prevent regulatory circumvention. This includes extending disclosure rules to offshore derivative instruments (ODIs) and segregated portfolios.
He also mentioned that in order to reduce administrative burdens, SEBI has introduced expanded exemptions from enhanced disclosure requirements. Additionally, all 17 custodians are now required to adhere to a unified standard operating procedure (SOP) for onboarding FPIs, ensuring greater consistency and efficiency.
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