SEBI's New Rule Limits NRI Share In FPI Corpus
These measures are intended to diversify the investment base and reduce concentration risks, the markets regulator said.
The Securities and Exchange Board of India has revised norms for registration of foreign portfolio investors which relate to non-resident Indians, overseas citizens of India, and resident Indians participating as overseas investors.
The updated regulation requires FPIs seeking registration to confirm that no single NRI, OCI, or resident Indian contributes more than 25% to its corpus, as per a notification issued on Thursday. The total contribution from these entities should not exceed 50% of the corpus.
These measures are intended to diversify the investment base and reduce concentration risks, the markets regulator said.
The regulatory changes now require that NRIs, overseas citizens of India and resident Indians should not be in control of the applicant FPI.
"The contribution of resident Indian individuals shall be made through the Liberalised Remittance Scheme, notified by the Reserve Bank of India and shall be in global funds whose Indian exposure is less than 50%," SEBI said.
The regulator has provided specific exemptions for applicants regulated by the International Financial Services Centres Authority and based in India's International Financial Services Centres in Gujarat's GIFT City.
