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Frequently Asked Question (FAQs)


SEBI (FOREIGN PORTFOLIO INVESTORS) REGULATIONS, 2014
Disclaimer: These FAQs are prepared with a view to guide market participants on SEBI (Foreign Portfolio Investors) Regulations, 2014 ("the Regulations"). For full particulars of laws governing the Foreign Portfolio Investors (FPI), please refer to the Acts/Regulations/Guidelines/Circulars etc. appearing under the Legal Framework Section of SEBI website i.e. www.sebi.gov.in. Any queries about the FPI Regime can be addressed to the Investment Management Department, SEBI.
I. Transition from FII to FPI Regime
Q1.
Can the existing Foreign Institutional Investors (FIIs)/Sub Accounts (SA) continue to buy, sell or deal in securities till the expiry of their current registration without payment of conversion fees during the validity of their registration?
Q2.
Whether the original validity of registration as FII/SA will remain the same upon conversion as FPI?
Q3.
Whether it is mandatory for a SA to convert as FPI, if its FII chooses to convert as FPI?
Q4.
Whether the existing FIIs and SAs that do not meet the eligibility requirements as stipulated under these regulations, can continue to deal in Indian securities e.g. where a fund (currently registered as a SA) is resident in a jurisdiction whose security market regulator doesn’t fulfil the conditions prescribed under the Regulation 4(b) can continue to deal in Indian securities as FPI?
Q5.
How will the proprietary SAs of FIIs be categorized in the FPI regime?
Q6.
Can an entity obtain more than one FPI registration (similar to the one allowed for MIM structures in the FII regime)?
Q7.
Whether the requirement of registering a broad based fund by non fund FIIs as stipulated under Regulation 6 (1) (d) (ii) and (iii) of SEBI (FII) Regulations, 1995 continue in FPI regime?
Q8.
FII and its SA are considered as Person Acting in Concert (PAC) for SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (SAST Regulations). With respect to SAST Regulation, what is the requirement for FPIs?
Q9.
Whether the existing FII/Sub-Account has to submit Form A as per FPI Regulations at the time of conversion as FPI?
Q10.
Whether existing FIIs/SAs be required to open new custody account, depository account, and bank account upon conversion to FPI or can they retain their existing accounts?
Q11.
The FII Regulations provide that investments by each FII/ SA shall not exceed ten percent of the total issued capital of an Indian company, while in the FPI regulations the applicable investment limit for each FPI is below ten percent. Whether the FIIs and SAs who hold 10% be required to disinvest the excess holdings?
Q12.
Can existing investments made as FIIs/SAs/Qualified Foreign Investors (QFIs) be retained under the FPI regime?
II. Transition from QFI to FPI Regime
Q13.
Can the existing QFIs continue to buy, sell or deal in securities without payment of conversion fees?
Q14.
How will the QFIs be categorized in the FPI regime?
Q15.
Whether an NRI, who has opened depository account as QFI, shall be deemed FPI in the FPI regime?
III. Eligibility of FPIs
Q16.
Whether entities which are not regulated eligible to register as FPIs?
Q17.
What is a Foreign Government Agency?
Q18.
What is meant by “regulated or supervised in same capacity in which it proposes to make investments in India”?
Q19.
Whether it is necessary for the FPI applicant to be regulated in its home jurisdiction?
Q20.
How would the Private Banks and Merchant Banks be classified? Should they be considered as appropriately regulated if they are regulated or supervised by the banking regulator of the concerned foreign jurisdiction and thus qualify to be Category II FPI?
Q21.
Can a Private Bank/Merchant Bank invest on behalf of its clients?
Q22.
Certain Jurisdictions e.g. Singapore treats certain intermediaries such as Merchant Banker/Broker Dealer as Exempt Financial Advisor. Whether such Exempt Financial Advisor can be registered as FPI in the category of Investment Advisor?
Q23.
Whether an FPI applicant having bank as an investor be considered to fulfil the broad based criteria?
Q24.
What is the recourse available to an FPI applicant if its registration application has been rejected by the DDP?
Q25.
Whether a fund having NRIs as its investors, eligible for grant of registration as FPI?
Q26.
Whether opaque structures are eligible to register as FPIs?
Q27.
What is the maximum time period within which the securities have to be transferred to the new custodian in case of change in DDP/Custodian?
Q28.
Who would consider application for free of cost transfer of assets?
Q29.
In those cases where a broad based fund which is categorized as Category-II FPI has a multiclass structure with a segregated portfolio, if one or more of the share classes loses its broad based nature, how should this overall fund be treated?
Q30.
Where an FPI ceases to fulfil the applicable eligibility requirements for a particular category, can such FPI continue to trade?
IV. Role and Responsibilities of Designated Depository Participant (DDP)
Q31.
How can the DDP determine if the applicant is regulated or supervised by:(a) the securities market regulator or (b) the banking regulator of the concerned foreign jurisdiction?
Q32.
How can the DDP determine if the FPI applicant is resident of a country whose securities market regulator is a signatory to (a) IOSCO’s MMOU (Appendix A Signatories) or a signatory to bilateral MOU with SEBI; (b) whose central bank is a member of Bank for International Settlements (BIS); (c) not listed in the public statements issued by FATF?
Q33.
How can the DDP verify the eligibility of Category I FPI?
Q34.
Whether a DDP is required to check validity of the document which shows the regulated status of the FPI applicant?
Q35.
Whether any past action against the FPI applicant by its regulator render the applicant ineligible for FPI registration?
Q36.
For the purpose of determining whether an applicant meets the Broad Based Fund criteria, what information should be obtained by the DDPs?
Q37.
How can the DDP determine whether an entity has been set up for the sole purpose of pooling funds and making investments?
Q38.
How can the DDP verify whether applicant is legally permitted to invest in securities outside the country of its incorporation or establishment?
Q39.
How can the DDP verify whether the applicant is authorized by its Memorandum of Association and Articles of Association or equivalent document(s) to invest?
Q40.
What are the indicative parameters based on which the applicant shall be considered as having sufficient experience, good track record, professionally competent, financially sound and having a generally good reputation of fairness and integrity?
Q41.
How can the DDP verify if the grant of certificate as FPI to the applicant is in the interest of the development of the securities market?
Q42.
What procedures should the DDP adhere to, to determine if the FPI is a 'fit and proper person' ?
Q43.
Is it necessary for the DDP to complete KYC process before grant of registration to the new FPI applicant?
Q44.
What is the manner of computing the thirty day period available to DDP for disposing of an application?
Q45.
Can a DDP consider an FPI application which has been previously rejected by another DDP?
Q46.
How will a DDP know whether the applicant’s registration application was rejected by some other DDP and what were the reasons for such rejection?
Q47.
How will a DDP ensure that equity shares held by FPIs are free from all encumbrances?
Q48.
How can the DDP ascertain that the FPI applicant does not have opaque structure(s)?
Q49.
Does every fund / sub fund / share class need to separately fulfil broad based criteria? Is prior approval required for launch of new share class from DDP?
Q50.
The FPI regulations state that the DDP shall preserve the books of accounts, records and documents specified in this regulation at all times. Is the DDP required to maintain all registration related documentation, all transaction details, etc. permanently?
Q51.
Is a DDP required to collect Form A from an FPI at the time of payment of registration fee for continuance of its registration as FPI?
V. Generation of FPI registration certificate
Q52.
Who will generate the FPI Registration number?
Q53.
How will a CDSL DP which is acting as a DDP request for FPI registration number?
Q54.
How will a NSDL DP which is acting as a DDP request for FPI registration number?
Q55.
Who will issue the FPI registration certificate to the FPI applicant?
Q56.
Can a DDP apply for registration of an FPI applicant simultaneously with NSDL and CDSL?
VI. Payment of Fees by FPI
Q57.
What is the manner of remittance of fees to SEBI by DDPs?
VII. Clubbing of Investment Limits
Q58.
What is the basis of clubbing of investment limit of FPIs? How will DDPs identify the entities forming part of an investor group? Also, what will be the procedure for monitoring of investment limits?
VIII. FPI Investments in Debt Securities
Q59.
What are the debt instruments in which the FPIs are permitted to invest in?
Q60.
What are the debt investment limits available to the FPIs?
Q61.
Are FPIs permitted to invest in unlisted debt securities?
Q62.
Is there any change in debt limit allocation mechanism for FPIs as compared to FIIs/QFIs?
Q63.
Are FPIs permitted to invest in Treasury Bills (T-Bills)?
Q64.
There was earlier a sub-limit of US$ 5.5 billion for FII/FPI investments in T-Bills. What happens to the FII/FPI investments in T-Bills that were made before the aforesaid SEBI circular dated April 07, 2014?
Q65.
Is there any restriction on FPI investments in G-Secs?
Q66.
Who will monitor the FPI debt investment limits?
Q67.
Where can the data on debt limit utilization by FPIs be found?
Q68.
Can FPIs offer Indian debt securities held by them as collateral?
IX. Offshore Derivative Instruments (ODIs)
Q69.
Can category I FPIs issue, subscribe to or otherwise deal in offshore Derivatives instruments?
Q70.
ODIs have been issued to unregulated funds under the FII Regulations. Whether these ODI positions can continue under the FPI regime? Whether the existing ODI subscribers can continue to subscribe to ODIs?
Q71.
Whether an ODI issuer can issue ODIs to existing entities, which were registered as clients but did not have positions as on January 07, 2014?
Q72.
Can an ODI issuer issue ODIs to those existing ODI clients (as on January 07, 2014) whose Investment manager undergoes a change?
Q73.
Can an ODI issuer continue to issue ODIs to those subscribers if there is a change in the category of such ODI subscriber, e.g. the ODI subscriber gets re-categorized by the DDP from Category II to Category III?
Q74.
Can Category III foreign portfolio investor issue, subscribe to or otherwise deal in offshore derivatives instruments?
Q75.
Can Insurance and Reinsurance companies subscribe to or otherwise deal in ODIs, directly or indirectly?
Q76.
Can university funds, pension funds and university related endowments already registered with SEBI as FIIs or SAs subscribe to or otherwise deal in ODIs, directly or indirectly?
Q77.
Whether the FPIs are required to report the ODIs to SEBI?
Q78.
Whether the FPIs can issue ODIs to Sovereign Wealth Funds/Foreign Government Bodies?
Q79.
Whether the ODIs can be transferred to any person?
Q80.
Whether the phrase "appropriate foreign regulatory authority" as mentioned in Regulation 22 of the regulations has the same meaning as referred under Explanation 1 of Regulation 5 (b) of the regulations?
X. Replies to Additional Queries received from DDPs
Q81.
In case of conversion of existing FII having MIM structure and its proprietary SAs, whether such FII needs to surrender its registration if all of its proprietary SAs are getting converted as FPI?
Q82.
What is the criterion to be followed for determining the appropriate category of FPI in case of conversion of a Proprietary SA of an FII, where the FII is regulated but the SA is not?
Q83.
In case of MIM structures in the FPI regime, should the parent fund first seek FPI registration and subsequently seek FPI registrations for various pools of funds (“pools”) managed by different Investment Managers? Or alternatively, can pools directly seek FPI registrations?
Q84.
There are FII/SAs which are registered under the MIM structure. Some of these FII/SAs are due for renewal in another year’s time and in the interim they intend to seek fresh FPI registration for pools. Whether such FII/SAs in the MIM structure would have to mandatorily convert to FPI prior to registering new pools as FPIs?
Q85.
Two applicants A (Bank) and B(subsidiary of a bank) wish to convert from FII to FPI. Their respective DDPs have sought SEBI's guidance / requisite approval to process these applications.
Q86.
One of the existing SA, which is unregulated, intends to convert as a Category II FPI, on the basis of its regulated investment manager. This SA, has been managed by an FII, which is registered under the bank category. In this regard, the queries are as under:
  1. Can the above FII be considered under the definition of the Investment Manager, allowing the above SA to register as Category II FPI?
  2. If yes, then whether the above FII is required to be converted as a FPI, before converting the SA as an FPI?
  3. Whether the above FII registered under the bank category is still required to comply with Regulation 6(1)(d)(ii) of the SEBI ( FII) Regulation, 1995?
Q87.
Is the conversion fees applicable to erstwhile QFIs which are deemed to be FPIs in terms of the Regulations?
Q88.
An FPI wishes to open depository account with both NSDL and CDSL due to non availability of certain scrip in demat form in both the depositories. Can such an FPI open more than one demat accounts? If yes, then can it open with the same DP or different DP?
Q89.
Kuwait does not appear in the IOSCO list nor does it reflect in the Bilateral MoU list. Please confirm whether applicants from Kuwait are eligible to seek registration as FPI?
Q90.
In case of an FPI applicant, belonging to bank category, is it required to be regulated by a Central Bank in its jurisdiction which is a BIS member or can it be regulated by another regulator in its jurisdiction, which is not a BIS member?
Q91.
Can an offshore company, whose beneficial owner is a NRI/PIO register as Category III FPI?
Q92.
The query relates to assessing an FPI applicant with a view to ensure that it is not an opaque structure such as PCC/SPC etc in terms of FPI framework. It states that an FPI applicant, which is currently registered as a Segregated Portfolio Company (SPC) does not fulfil broad based criteria. However, it complies with the other two conditions viz. it is regulated and willing to provide information regarding its beneficial owners as and when SEBI seeks. Is such an applicant eligible to get registered as Category III FPI?
Q93.
Can a Sovereign Wealth Fund (SWF) desirous of seeking FPI registration, avail services of an external agency / firm to handle its compliance related matters?
Q94.
The queries deal with the procedure of a name change request in case of an existing FII/SA, who is yet to get converted as FPI.
Q95.
Whether an entity formed in a qualifying jurisdiction such as USA or UAE but having beneficial owners who are residents (distinct from citizens) of non-qualifying jurisdiction (For eg : Qatar or Pakistan) could qualify as a FPI ?
Q96.
Whether DDP can register a company as FPI if it happens to be its associate/group company?
Q97.
With regard to name change, would the concerned Depository portal have a facility where a DDP can enter requests for name change? Also, whether the depository would issue standard acknowledgement upon taking record of name change?
Q98.
Prior to commencement of FPI regime, SEBI (ICDR) Regulations, 2009 considered all the FIIs and SAs as Qualified Institutional Buyers (QIBs) except those which were registered under the category of Foreign Corporate and Foreign Individual. Subsequent to notification of SEBI (FPI) Regulations, 2014, the definition of QIB has been amended in ICDR Regulations by considering only Category I and Category II FPIs as QIBs. It is requested to clarify that whether deemed FPIs who have earlier been granted SA registration under the ‘foreign corporate’ category but are currently classified as Cat II FPIs should be considered as QIBs (and therefore allowed to enjoy all investment avenues open to QIBs like subscription to IPO, anchor investment, etc)?
Q99.
As per Q 49 of FAQs, in case of addition of share class, FPIs are required to seek prior approval from the DDP. For this purpose, the DDP is required to seek the prescribed declaration and undertaking (D&U) from the FPI relating to its PCC/ MCV status. It is requested to clarify that whether DDP is required to seek any additional documents from investors such as prospectus etc. and if so, what would be the nature of due diligence required from the DDP?
Q100.
If the prospectus of a fund (registered as FPI) allows for share classes such as various currencies, can such an FPI request for addition of share class for every single iteration/variant of a share-class at one time irrespective of whether it actually launches the share-class or not?
Q101.
An existing proprietary SA of an erstwhile FII now wants to start accepting investments from other investors and hence wants to apply for change in its registration category as a non-proprietary fund. Will such a SA need to necessarily convert to FPI for this purpose? In this case, the proprietary SA is a separate legal entity from the FII. Can such a SA convert to FPI under Category II or Category III (in case it doesn’t meet broad based requirement) without the need for the FII and all the other SAs to be converted as FPI?
Q102.
It has been clarified by SEBI that proprietary SA of the FII shall be categorized based on the beneficial ownership and may be placed in the same category as its FII. It is requested to clarify on the percentage of beneficial ownership to be considered for Proprietary SA to be placed in the same category as its FII. Would all entities where the FII’s ultimate beneficial ownership (UBO) is 50% or more be eligible?
Q103.
Can a DDP register proprietary accounts for the purposes of internal segregation (other than for MIM purposes)? Are there any limitations on how many such proprietary FPIs can be registered?
Q104.
Multilateral organizations may not have documents like the Tax Residency Certificate or Certificate of Incorporation. In such cases, what document can be obtained to evidence proof of residency?
Q105.
As per the reply to Q1 of FAQs, an FII is required to return the original certificate of registration to the DDP at the time of conversion. In case an FII has misplaced/ lost the original certificate of registration, can the DDP accept an undertaking from the FPI stating they will return the original certificate immediately if they find it in future?
Q106.
If a fund fails to satisfy the broad based criteria within the prescribed timeframe (180 days) and get reclassified to Cat III, it is understood that such FPIs would not be eligible for any fee refund (difference between Cat III fees and Cat II fees). If, however, this fund subsequently again becomes eligible under Cat II will the applicant be required to pay the differential fees between Cat III and Cat II again since it has already paid the same upfront?
Q107.
There are cases where SEBI has granted conditional registration to SA prior to the commencement of FPI regime with initial period of 90 days and the deadline for the SA / share-class to meet broad based requirement falls due post 01-Jun-14. In such cases, where the client seeks extension for another 90 days whether such requests should be referred to SEBI or can the DDP grant such extension? Further, if the DDP is permitted to grant extension (total period not exceeding 180 days) then does the DDP need to report such extension to SEBI or NSDL, and if so, in what manner?
Q108.
The FII regulations required a non-fund FII to register at least one broad based SA under it. Accordingly, SEBI in its approval letter has included a condition for certain FIIs to register broad based fund within a given timeline that fall due post 01-Jun-14. However, since the requirement of broad based SA no longer exists, request SEBI to provide a clarification that this condition need not be fulfilled by such FIIs now.
Q109.
There may be some jurisdictions that have multiple categories of recognition, and may distinguish between entities that are registered vis-à-vis entities that are regulated by it. Typically both categories of recognition would be considered adequate for the purpose of ascertaining the regulated status of the applicant. It is requested to clarify the above understanding.
Q110.
European Central Bank (ECB) is one of the Member Central Banks as listed in the BIS website. It is requested to clarify as to which European countries can be included/ form part of the European Central Bank for the purpose of ascertaining whether their central bank is a member of BIS.
Q111.
In case of a multi-share class fund, whose various share-classes do not have a common portfolio or do not independently (at share class level) meet broad based requirement then such a fund would need to seek registration under Category III even if it meets broad based requirement at an overall level. It is requested to confirm that whether such fund would only be eligible for registration under Category III.
Q112.
As per the reply to Q40 of the FAQs, Category III FPI applicants are required to furnish a certificate from their banks certifying that they have satisfactory banking relationship for more than a year. However, in the given case the entity was set-up less than one year back and is already registered as a SA. Accordingly, can this entity be exempted from the requirement of such bank certificate?
Q113.
Are individual FPIs allowed to obtain FPI registration in joint names (i.e. in the names of spouse, son, daughter, etc)? If yes, are the DDPs required to generate single FPI registration certificate in joint names?
Q114.
In case of a company/AMC registered and regulated in one of the eligible jurisdictions whose ultimate beneficial owner is/are Indian company/PIO/NRI/resident Indian, the following may be clarified:
  1. The company is planning to launch an appropriately regulated broad based fund used solely to pool funds from foreign investors and then invest in India through the FPI route. Whether the fund is allowed to register as Category II FPI? Should the beneficial ownership of the company launching the fund be considered? It is understood that beneficial ownership of the company may not be considered as the fund solely consists of funds pooled from foreign investors.
  2. Can an entity which is incorporated outside India register as FPI where the beneficial owner of that company is a resident Indian?
Q115.
In Netherlands there are investment structures which under the Dutch law are known as fondon voor gemene rekening (FGR). FGR is a pooled investment vehicle. It is not a legal entity. It is created by agreement between the fund manager, the custodian/depositary and one or more investors. The agreement obliges the fund manager to invest and manage the joint account of the investors. Usually, the legal ownership of the FGR assets is held by a separate custodian. The FGR is not required to obtain a license from the securities market regulator of the Netherlands. However, the fund manager of the FGR must have a license to operate. An FGR meeting certain requirements can claim exemption with regards to having a licensed fund manager. Whether a FGR can be granted Category III FPI registration under the Regulations? Alternatively, can the custodian of the FGR holding assets on behalf of the FGR be registered as Category III FPI on behalf of the FGR?
Q116.
Can SEBI provide a consolidated list of eligible jurisdictions for FPI?
Q117.
In the erstwhile FII regime, the sub funds/schemes of a Trust/Mutual Fund/Asset Management Company/SICAV used to seek registration as a SA. They were not regulated by the securities market regulator. Whereas, the Trust / Mutual Fund / Asset Management Company/SICAV used to seek registration as FII which were regulated by the securities market regulator.

In the FPI regime, can these sub funds/schemes be considered as regulated entities on the basis of their Trust/Mutual Fund/Asset Management Company/SICAV and get registered as Category II FPI without the need for the Trust / Mutual Fund / Asset Management Company/SICAV to get registered as a FPI?
Q118.
In case of an unregulated broad based fund namely "X", seeking registration as Category II FPI by virtue of its investment manager namely "Y" registered as Category II FPI, does X need to have investment management agreement with Y to be eligible to get registered as Category II FPI? Can "X" also appoint other investment manager namely "Z", who may not seek registration as Category II FPI?
Q119.
A Mauritius based bank seeking registration as FPI is regulated by “The Bank of Mauritius” (The Banking regulator in Mauritius). However, the regulator is not a member of “BIS”. Hence the applicant is not eligible for registration as Category II in terms of the Regulations. Whether the aforesaid applicant can be considered for registration under Category III FPI (considering them as a financial institution) as the securities market regulator of Mauritius is a signatory to IOSCO MMOU.
Q120.
In reply to Q86 of the FAQs it has been inter alia clarified that an FII is not required to convert as Category II FPI prior to the conversion of a SA as the FII is deemed to be an FPI, in terms of the Regulations.

Thus, it is requested to clarify that even in case of an unregulated broad based fund, seeking registration as a Category II FPI, on the basis of its Investment Manager, which is registered as FII, such FII is not required to be converted as Category II FPI, before granting registration to an unregulated broad based fund as Category II FPI.
Q121.
Where the applicant is a fund having MCV structure but is not broad based and desires to seek registration as Category III FPI, how will it declare its MCV status?
Q122.
In reply to Q26 of the FAQs it has been clarified that an FPI applicant will not be considered as opaque structure and will be considered for grant of registration if it is required by its regulator or under any law to ring fence its assets and liabilities from other funds/ sub funds. Such applicants shall be eligible to be register as FPIs only upon meeting the following criteria:
  1. the applicant is regulated in its home jurisdiction;
  2. each fund/ sub fund in the applicant satisfies broad based criteria, and
  3. the applicant gives an undertaking to provide information regarding its beneficial owners as and when SEBI seeks this information.
Are the above criteria applicable to those funds which neither meet broad based criteria nor want to seek conditional approval but belong to jurisdictions that allow ring fencing?
Q123.
Are FPIs allowed to invest in portfolio schemes managed by Portfolio Managers in India? If yes, what is the procedure for the same?
Q124.
An FPI cannot continue to buy, sell or otherwise deal in securities post expiry of its registration. However, can such an FPI apply for renewal/continuation/conversion post expiry of its registration? If yes, what should be the time frame after the expiry before which the DDP can accept renewal/continuation/conversion application?
Q125.
In case a newly established applicant has less than one year of track record and applies under Category III FPI, whether the track record of its investment manager (or equivalent) or its parent or group company (having beneficial ownership of more than 50%) can be taken into consideration for satisfying conditions mentioned in Regulation 4(h) of the Regulations. If so, whether a certificate from the bank certifying that the investment manager or parent or group company having satisfactory banking relationship for more than a year can be considered instead of that of applicant?
Q126.
Can a DDP process application of its existing clients i.e. erstwhile FII/SA/QFI for their conversion/continuance of registration by obtaining only fresh documents which are not available with DDP instead of obtaining all documents. Or can a DDP process the application by obtaining an undertaking stating that there is no change in the documents previously submitted?
Q127.
Can a foreign bank, ultimately owned by an NRI, be eligible to register as an FPI?
Q128.
It is observed that in USA, Collective Investment Funds (CIFs) meeting the conditions specified in the Investment Company Act of 1940 are not required to register with U.S. Securities and Exchange Commission (SEC). CIFs are sponsored/administered by national banks, which are regulated and supervised by Office of the Comptroller of the Currency (OCC). Can such CIFs be eligible to get registered as Category II FPI?
Q129.
An unregulated broad based fund namely "X" was registered as Category II FPI on July 01, 2014 by virtue of its investment manager namely "Y", which was registered as Category II FPI on June 01, 2014. Will the expiry of registration of "X" be co-terminus with "Y" or will it be an independent block of 3 years?
Q130.
An unregulated fund namely "X", desirous of seeking FPI registration, is having only one fund namely "Y" as its sole investor. "Y" has appointed its investment manager namely "Z" to manage the investments. Can a DDP categorize "X" as category II FPI in terms of Regulation 5 (b) (iii) of the SEBI (FPI) Regulations, 2014 ("the Regulations")?
Q131.
How will the erstwhile FIIs and Sub Accounts (SAs) which do not meet the eligibility requirements as stipulated under the Regulations, be categorized? For instance, an erstwhile Mauritius based FII registered under the Bank category, is regulated by its banking regulator, which is not a member of BIS. The FII now intends to convert as FPI. Under which category, will such an FII be categorized?
Q132.
Under the FPI regime, if an erstwhile FII intends to surrender its certificate of registration as FII, does all of its underlying sub accounts (now deemed FPIs) need to mandatorily convert themselves to FPIs at the time of surrender of its FII registration? If not, then what will be the validity of registration of such sub accounts post surrender of registration by the FII?
Q133.
SEBI circular ref. no. CIR/IMD/FIIC/21/2013 dated December 19, 2013 prescribes three specific conditions that need to be satisfied by an FPI applicant, which is required by its regulator or under any law to ring fence its assets and liabilities from other funds/ sub funds. Can such an FPI applicant can seek conditional registration which allows it to satisfy broad based criteria within 180 days?
Q134.
Can a DDP grant approval to post facto requests for addition of share classes?
Q135.
An FPI applicant is an Investment Holding Company having Global Business License (GBL)-1 from Financial Services Commission (FSC), Mauritius and meets the broad base criteria. Whether such applicant will be considered as “Appropriately Regulated” in terms of Regulation 5(b) of SEBI (Foreign Portfolio Investors) Regulations, 2014 ("the Regulations")?
Q136.
In reply to Q 94 of FAQs relating to the procedure to be followed for name change request in case of an existing FII/SA who is yet to get converted as FPI it has been inter-alia mentioned that the DDP shall retain with it the original FII registration certificate earlier issued by SEBI to such an erstwhile FII. Can SEBI provide guidance in case the FII has misplaced/lost the original certificate of registration?
Q137.
The Regulation 21(4)(f) of the Regulations inter alia states that an FPI shall hold, deliver or cause to be delivered securities only in dematerialized form. In view of the same, can SEBI provide guidance on whether an FPI can continue to hold, purchase and deliver Rights entitlements which are non-dematerialised and are issued in physical form only.
Q138.
The process of surrender requests of FPIs is specified in clause 3 of Operational Guidelines for DDPs dated January 08, 2014. In this regard, is the DDP required to confirm nil balance of holdings in the security account and bank account of the FPI to SEBI?
Q139.
Can an erstwhile FII (now deemed FPI) apply for transfer of its FPI (erstwhile SAs) to another FPI?
Q140.
Can an FPI invest in listed Non Convertible Debentures (NCDs) of non-infrastructure companies?
Q141.
Is an erstwhile FII/Sub Account required to pay applicable conversion fee even after expiry of its registration validity?
Q142.
An FPI applicant namely "X", desirous of seeking category III FPI registration, is having satisfactory banking relationship with its bank namely "Y" for more than a year. "X" has now changed its bank from "Y" to "Z" just before submitting FPI application to a DDP. Can a DDP consider a bank certificate from "Y"?
Q143.
Can a foreign citizen, who does not have any PIO/OCI registrations in India, though born in India, be allowed to invest through the FPI route?
Q144.
Can a FDI investor holding equity stake in Indian company through the FDI route make debt investments in the same company simultaneously as an FPI?
Q145.
Whether an FPI can invest in unlisted non-convertible debentures (NCDs)/bonds issued by an Indian company, which is not in the infrastructure sector, however, issue proceeds are proposed to be invested in infrastructure sector?
Q146.
Can a DDP namely "X" re-categorize an FPI namely "Y", which is already registered under category III, to category II, during the validity of its registration, if "Y" fulfills the eligibility requirements applicable to Category II FPI?
Q147.
An unregulated broad based fund namely "X" wishes to get registered as category II FPI by virtue of "Y" as its investment manager. "X" is having investment management agreement with "Y". "Y" is registered as category II FPI under the bank category. The license/registration granted to "Y" by its regulator permits it to carry out activities related to investment management. "Y" is the only investor in "X". Can X" be treated as compliant to Regulation 5(b)(iii) of the Regulations?
Q148.
Whether a DDP can categorize an unregulated FPI applicant under category II, on the basis of its holding company, which is a regulated entity and is registered as a Category II FPI?
Q149.
In some jurisdictions, Limited Liability Partnership (LLP) / Limited Liability Company (LLC) are used as legal structure for pooling / investment vehicles. Can a DDP consider such structures be considered as equivalent to funds?
Q150.
With respect to Regulation 5(b)(iii), can an FPI applicant which is unregulated and currently not satisfying broad based criteria seek conditional registration under Category II on the basis of its investment manager which is registered as a Cat II FPI?
Q151.
In case of MIM structures in the FPI regime, whether the proprietary FPI applicants i.e. various pools of funds (“pools”) managed by different investment managers are required to provide broad based details at the time of seeking FPI registration if the same details have already been furnished to a DDP by its parent fund at the time of seeking registration as FPI?
Q152.
A non-investing entity is applying for FPI registration in the category of Investment Advisor/Manager for the sole purpose of Regulation 5(b)(iii) of the Regulations and will not make any proprietary investment after its registration as category II FPI. In such a case, whether a DDP is required to obtain relevant documents from the FPI applicant whereby it has been clearly authorized to invest outside its country of incorporation/ establishment?
Q153.
If an erstwhile QFI (i.e. deemed FPI) is ineligible to covert to FPI within the stipulated timeframe i.e. January 06, 2015 then can such an erstwhile QFI continue to hold the equity/debt which it has invested upto the aforesaid timeframe?
Q154.
In case of a Master-Feeder structure, can a DDP consider feeder fund's PCC/MCV Declaration and Undertaking (D & U) as specified in SEBI Circular No. CIR/IMD/FIIC/1/ 2010 dated April 15, 2010, which has been submitted by its master fund (i.e. FPI applicant) on behalf of the feeder fund?
Q155.
If an FPI applicant, which is present in multiple jurisdictions, is suspended by one of its foreign regulator and if this suspension does not affect the entity or any of its affiliates’ ability to trade in any other country around the world, whether a DDP can consider such an applicant eligible for grant of FPI registration?
Q156.
Is an FPI applicant being a fund required to provide the details of disciplinary history for its sponsor/promoter investment manager in the application form 'A' for grant of registration as an FPI?
Q157.
Where an FPI applicant is a fund, is it required to provide the details of its umbrella fund/its promoter/its sponsor etc. under the group details in clause 1.7 in the application form 'A' for grant of registration as an FPI?
Q158.
An FPI applicant namely "X', which is master fund, has two underlying feeder funds namely 'Y' and 'Z' with 'Y' holding more than 49% in 'X'. While ascertaining the fulfillment of broad based criteria by 'X', whether a DDP is required to consider the underlying investors of both the feeder funds together or separately.
Q159.
A sovereign wealth fund (SWF) namely "X" holds more than 49% in a fund namely "Y", which is seeking FPI registration. Can a DDP consider "Y" as broad based in terms of SEBI (FPI) Regulations, 2014?
Q160.
In case of a Master-Feeder structure, PCC/MCV Declaration and Undertaking (D & U) as specified in SEBI Circular No. CIR/IMD/FIIC/1/ 2010 dated April 15, 2010 of the feeder fund is also required to be submitted to a DDP. In certain jurisdictions there are restrictions to disclose the name of the underlying investors in the fund. In such cases, can a DDP consider PCC/MCV D&U for such feeder fund, which has generic details of such investor (viz. bank, sovereign fund, mutual fund, insurance, etc.) instead of its name?
Q161.
Whether pension/retirement plans of international or multilateral organizations or agencies will be categorized as Cat I or Cat II FPI?
Q162.
A private bank namely "Y" is one of the investors in a fund namely "X", which seeks to get registered as an FPI. "Y" intends to invest on behalf of multiple clients. Can a DDP consider "X" eligible for grant of registration as an FPI?
Q163.
If a regulated fund, seeking FPI registration, is a non-broad based and confirms to a DDP that it does not intend to become broad based in future, can the DDP consider it for grant of registration as category III or category II conditional registration?
Q164.
It has been clarified in reply to Q # 49 of the FAQs that every fund / sub fund / share class needs to separately fulfil broad based criteria. Does this requirement apply to those funds/sub funds/share classes which do not invest in India?