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Circular No. FITTC/FII/04/2002
July 19, 2002


All Foreign Institutional Investors and Custodians of Securities

Dear Sir/Madam,

Sub: Clarifications regarding operations of Foreign Institutional Investors

The Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 (hereinafter referred to as ‘Regulations’) stipulate the modalities of portfolio investment by Foreign Institutional Investors (FII) in the Indian securities markets. The following decisions / steps have been taken in this regard:

Reporting of transactions by Foreign Institutional Investors :

With a view to monitoring the trends of investment by FIIs, SEBI had asked the FIIs to submit the details of transactions made by them on daily basis as specified in regulation 16 (2) (b) of the Regulations.

Initially the FII transaction reporting was done in dBase. Subsequently a comprehensive program was developed in Oracle for this purpose. The operational guidelines for the Oracle program have already been communicated vide Circular No. FITTC/CUST/3/1998 dated November 20, 1998. The operational guidelines / procedures have been reviewed and modified to include reporting of transaction related to buyback, open offers, write-off of securities etc. The revised version (Version 2.0) of the operational guidelines is enclosed for information and compliance.

The revised guidelines also include reporting of debt transactions which would be implemented from August 1. 2002. Custodians should continue to report daily debt transaction in the existing format (dBase) till further instructions.

The revised guidelines supercede the previous instructions conveyed vide our circular no. FITTC/CUST/3/1998 dated November 20, 1998.
Leakage of trade data:

SEBI had received some complaints regarding leakage of information relating to FII trades. SEBI has taken strong exception to this issue. This issue was taken up in the Risk Management Group meeting. SEBI has asked the stock exchanges to reiterate to their employees that they should abide by the code of conduct. Also, the exchanges would draw attention of the members of the exchange by way of a ticker message and a circular reiterating that the confidentiality of the client information should be ensured as required under broker-client agreement.

FIIs are also advised to put in adequate checks at their end to ensure that there is no information leakage at their end or from their dealing rooms.

The custodians of securities are requested to bring the contents of this circular to the notice of their constituents. The circular is also available at the web page ‘Foreign Institutional Investors’ on the SEBI website at

Yours faithfully,


General Manager

Encl : As above.

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