On May 31, 2024, the Securities and Exchange Board of India (SEBI) announced significant amendments to the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019. These changes aim to streamline the regulatory framework governing foreign portfolio investors (FPIs) in India. The updated regulations address various compliance aspects, introduce new deadlines, and specify penalties for non-compliance.
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 31st May, 2024
SECURITIES AND EXCHANGE BOARD OF INDIA (FOREIGN PORTFOLIO INVESTORS) (AMENDMENT) REGULATIONS, 2024
No. SEBI/LAD-NRO/GN/2024/183 —In exercise of the powers conferred by sub-section (1) of Section 30 read with sub-section (1) of Section 11, clause (ba) of sub-section (2) of section 11 and sub-sections (1) and (1A) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), and under Section 25 of the Depositories Act, 1996 (22 of 1996), the Board hereby makes the following regulations, to further amend the Securities and Exchange Board of India (Foreign Portfolio Investors ) Regulations, 2019, namely, –
1. These regulations may be called the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2024.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, –
I. In regulation 7,
i. in sub-regulation (5), the proviso shall be substituted with the following namely,-
“Provided that a foreign portfolio investor, whose certificate of registration is not valid as on the date of commencement of the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2024 and is holding securities or derivatives in India, shall be allowed to sell such securities or wind up their open position in derivatives in India within three hundred and sixty days from the date of commencement of the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2024 , in the manner specified by the Board.”
ii. After sub-regulation (5), the following new sub-regulations shall be inserted, namely,-
“(6) A foreign portfolio investor shall pay the registration fees, as provided in Part A of the Second Schedule for every block of three years, before the beginning of such block:
Provided that the foreign portfolio investor shall be considered to have paid the registration fees in accordance with this sub-regulation, if it pays the registration fees along with the late fee, as provided in Part A of the Second Schedule, within a period of thirty days from the date of expiry of the preceding block:
Provided further that if the foreign portfolio investor does not pay the required registration fee and the late fee as may be applicable and continues to hold securities or derivatives in India, it shall be allowed to sell such securities or wind up their open position in derivatives in India within three hundred and sixty days from the date of expiry of thirty days as provided above, under such terms and conditions and in such manner as may be specified by the Board, from time to time.
(7) The additional period granted under sub-regulations (5) and (6) of this regulation shall be without prejudice to any action as may be initiated by the Board in accordance with the provisions of the Act and the regulations framed thereunder.
(8) A foreign portfolio investor whose certificate of registration is not valid and has not sold off the securities or wound up their open position in derivatives in India as per the provisions of these regulations shall be deemed to have written off the securities in such manner as may be specified by the Board from time to time.”
II. In regulation 9, in sub-regulation (3), the following shall be inserted, namely,- “Explanation: For the purpose of this sub-regulation, a foreign portfolio investor who has paid the registration fee and the late fee in accordance with sub-regulation (6) of regulation 7 shall be considered to have paid the required fees within the specified due date.”
III. In regulation 22,
i. in sub-regulation (1), in clause (b),
a. the words and symbol “as soon as possible but not later than seven working days,” shall be omitted.
b. after the words “in any material respect”, the words and symbol “, in the manner and within the timelines as may be specified by the Board from time to time” shall be inserted.
ii. in sub-regulation (1), in clause (c),
a. the words and symbol “as soon as possible but not later than seven working days,” shall be omitted.
b. after the words “furnished by him to the Board or designated depository participant”, the words and symbol “, in the manner and within the timelines as may be specified by the Board from time to time” shall be inserted.
iii. in sub-regulation (1), in clause (e),
a. the words and symbol “as soon as possible but not later than seven working days,” shall be omitted.
b. after the words “overseas regulator against it”, the words and symbol “, in the manner and within the timelines as may be specified by the Board from time to time” shall be inserted.
iv. in sub-regulation (5),
a. the words and symbol “,as soon as possible but not later than seven working days,” shall be omitted.
b. after the words “notice of its designated depository participant”, the words and symbol “, in the manner and within the timelines as may be specified by the Board from time to time” shall be inserted.
IV. In Second Schedule, in Part A, clause 4, the symbol “.” shall be substituted by the symbol “:” and the following proviso shall be inserted, namely,-
“Provided that a foreign portfolio investor shall, wherever applicable, pay the late fee of US $ 50 per day for Category I and US $5 per day for Category-II foreign portfolio investors.”
BABITHA RAYUDU, Executive Director
[ADVT.-III/4/Exty./155/2024-25]
Footnote:
The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019, the Principal Regulations were published in the Gazette of India on September 23, 2019 vide No. SEBI/LAD-NRO/GN/2019/36).
2. The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 were subsequently amended on –
(1) 19th December, 2019 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2019 vide No. SEBI/LAD-NRO/GN/2019/44.
(2) 7th April, 2020 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2020 vide No SEBI/LAD-NRO/GN/2020/09
(3) 17th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/10.
(4) 3rd August, 2021, by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2021, vide No. No. SEBI/LAD-NRO/GN/2021/30.
(5) 3rd August, 2021 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2021 vide No. SEBI.LAD-NRO/GN/2021/32.
(6) 26th October, 2021 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2021 vide No. No. SEBI.LAD-NRO/GN/2021/54
(7) 14th January, 2022 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/64
(8) 9th November, 2022 by the Securities and Exchange Board of India (Payment of Fees (Amendment)
Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/99
(9) 14th March, 2023, by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/128.
(10) 3rd July, 2023, by the Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/137
(11) 10th August, 2023 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/143
