GAZETTE OF INDIA
EXTRAORDINARY
PART
III SECTION 4
PUBLISHED BY AUTHORITY
NEW DELHI, APRIL 5, 2018

SECURITIES AND EXCHANGE BOARD OF INDIA

NOTIFICATION

Mumbai, the 5th April, 2018

SECURITIES AND EXCHANGE BOARD OF INDIA (FOREIGN PORTFOLIO
INVESTORS) (AMENDMENT) REGULATIONS, 2018

No. SEBI/LAD-NRO/GN/2018/05.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 and section 25 of the Depositories Act, 1996, the Securities and Exchange Board of India hereby makes the following regulations to further amend the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, namely,—

1. These regulations may be called the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2018.

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, 2014, –

I. in regulation 4, to clause (b) the following proviso shall be inserted, namely,-

“Provided that an applicant falling under Category I foreign portfolio investor, as defined in clause (a) of Regulation 5, shall be considered as eligible for registration, if the applicant is a resident in a country as may be approved by the Government of India.”

II. to regulation 4, the following proviso shall be inserted after clause (k) and before the explanation to regulation 4, namely,-

“Provided that, in respect of a Category I or Category II foreign portfolio investor, as defined in clause (a) or clause (b) of Regulation 5, clauses (f), (g) (h)and (i) of this regulation shall not be applicable.”

III. in regulation 5, in clause (b), in sub-clause (ii), after the words “portfolio manager” and before the symbol “;” insert the following words and symbol, namely,-

“, broker dealers and swap dealers”

IV. in regulation 5, in the second explanation to clause (b), in clause A), after the existing proviso following provisos shall be inserted, namely,-

“Provided further that if a foreign portfolio investor has a Bank, Sovereign Wealth Fund, Insurance/ Reinsurance company or a Pension Fund as its institutional investor, then such an applicant shall be deemed to be broad based subject to the condition that such institutional investor(s) shall, jointly or separately, hold more than fifty percent of the shares or units of the fund in the applicant fund at all times:

Provided also that in cases where broad based status is achieved on the basis of investor(s) of an underlying fund, then such underlying fund shall also be required to fulfil the extant eligibility requirements as specified for foreign portfolio investors from time to time by the Board.”

V. in regulation 5, in the second explanation to clause (b), after clause C), the following clause shall be inserted, namely,-

“D) Exit of some investors from a broad based fund will not result in immediate loss of Category II status of such fund. Such fund may regain broad based status within a period of 90 days, failing which, the fund shall be appropriately recategorised.”

VI. in regulation 23, in sub-regulation (1), –

i. existing clauses (h) and (i) shall be re-numbered as clauses (i) and (j) respectively;

ii. after clause (g) and before clause (i) the following clause (h) shall be inserted, namely, –

“(h) be a fit and proper person based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008;”

iii. for clause (j) the following clause shall be substituted, namely, –

“(j) provide any additional information or documents including beneficiary ownership details of their clients as may be required by the designated depository participant or the Board or any other enforcement agency to ensure compliance with the Prevention of Money Laundering Act, 2002 and the rules and regulations prescribed thereunder, the Financial Action Task Force standards and circulars issued from time to time by the Board.”

VII. in regulation 32, in sub-regulation (2), to clause (d) the following explanation shall be inserted, namely,-

“Explanation. – An encumbrance created to meet any statutory and regulatory requirements shall not be considered under this clause.”

sd/-

AJAY TYAGI

CHAIRMAN

SECURITIES AND EXCHANGE BOARD OF INDIA

Footnote:

1. The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 were published in the Gazette of India on 7th January, 2014 vide No. LAD-NRO/GN/2013-14/36/12.

2. The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014, were subsequently amended on:

(a) July 8, 2016 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2016 vide notification no. SEBI/LAD-NRO/GN/2016-17/009;

(b) January 12, 2017 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2017 vide notification no. SEBI/LAD-NRO/GN/2016-17/018;

(c) February 27, 2017 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2017vide notification no. SEBI/LAD/NRO/GN/2016-17/035;

(d) March 6, 2017 by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 vide notification no. SEBI/LAD/NRO/GN/2016-17/037  read with notification no. SEBI/LAD/NRO/GN/2016-17/38 dated March 29, 2017;

(e) May 29, 2017 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Third Amendment) Regulations, 2017 vide notification no. SEBI/LAD/NRO/GN/2017-18/04.

(f) July 20, 2017 by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Fourth Amendment) Regulations, 2017 vide notification no. SEBI/LAD/NRO/GN/2017-18/12.

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