Capital markets regulator Securities and Exchange Board of India (Sebi) has made stringent norms for Foreign Portfolio Investors (FPIs), asking them to disclose any material change in their structure and common ownership within seven working days. With regard to new FPI registrations, Sebi can ask them for any additional documents which may be required, according to a notification.
Under the new rules, FPIs will inform Sebi and designated depository about any false or misleading information about change in material respect and any change in their structure or control within seven working days in writing. In addition, FPIs will have to inform in case of any penalty, pending proceedings, findings of investigations for which action may have been taken or is in the process of being taken by an overseas regulator against them within seven days.
"In case of any direct or indirect change in structure or common ownership or control of the foreign portfolio investor or investor group, it shall, as soon as possible but not later than seven working days, bring the same to the notice of its designated depository participant," Sebi said. In turn, depository participants will submit the information to the markets regulator within two days.
Earlier as per the existing rules, FPIs were required to inform the Designated Depository Participant IMMEDIATELY, which has now been replaced with “as soon as possible but not later than seven working days”. The regulator believes that FPIs used to take a long time in disclosing this information as there was no strict timeline prescribed in the rules. SEBI said that the new rules have come into effect from March 14.
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