Sebi eases disclosure norms for FPIs

The Securities and Exchange Board of India has decided to exempt foreign portfolio investors who have over 50% of their India exposure in a single corporate group from additional disclosure requirements.

Other relaxations may also be given to these FPIs to facilitate ease of doing business.

The decision was take by the board meeting of the regulator on Friday. It was decided to ease the timelines for disclosure of material changes by FPIs.

According to a press release, Sebi will be categorising material changes into two different categories with changes under Type I to be informed to the designated depository participant within seven days, and  Type II changes to be informed in 30 days.

The board also approved flexibility measures for FPIs in dealing with the securities post expiry of their registration, including a proposal to reactivate a registration within 30 days of expiry if it is due to non-payment of registration fee and providing for a time period of 180 days or end of registration block, whichever is later, for disposal of securities.

Further, the regulator listed conditions for cases where the securities held by an FPI have not been disposed of even after the lapse of the specified time period of 180 days. This will include an additional 180-day time period availing which will cost the FPI 5 per cent of the sale proceeds as a financial disincentive, the release said.

Securities remaining unsold after the expiry of the additional 180-day period shall be deemed to have been compulsorily written off by the FPI, it added.

For existing cases where securities are lying in the accounts of FPIs whose registration has expired, Sebi has also granted a one-time opportunity of 360 days, which includes 180 days without any financial disincentive, and an additional 180 days with a 5 per cent financial disincentive.

Written-off securities shall be transferred to an escrow account, operated by an exchange empanelled broker.

The broker shall attempt to sell the securities at the available market price until the securities are disposed of. The proceeds from the sale shall be transferred to the Sebi’s Investor Protection and Education Fund, as per the release.

(With inputs from PTI)