New Delhi: Markets regulator Sebi today said registered FPIs planning to set up operations in international financial services centres (IFSCs) will be allowed to do so without any additional documentation.
Foreign Portfolio Investors (FPIs), who presently operate in Indian securities market and propose to operate in IFSC also, will be required to ensure clear segregation of funds and securities.
Custodians will have to monitor compliance of this provision for their respective FPI clients. Such FPIs would keep their respective custodians informed about their participation in IFSC.
The decision has been taken in consultation with the stakeholders on the proposed regulatory framework on participation of Eligible Foreign Investors (EFI) in IFSCs.
In case of participation of FPIs in IFSC, a trading member of the recognised stock exchange in IFSC, may rely upon the due diligence process already carried out by a Sebi registered intermediary during the course of registration and account opening process in India.
With regard to an EFI which is not registered with Sebi as an FPI but desirous of operating in IFSC, trading member of the recognised bourse in IFSC can rely upon the due diligence carried out by a bank, which is permitted by RBI to operate in IFSC, during the account opening process.
The Securities and Exchange Board of India (Sebi), in March 2015, had issued a detailed set of guidelines for establishing IFSCs as part of its efforts for setting up financial hubs in the country. The first such centre has been set up in Gujarat's GIFT City.
"Sebi registered FPIs proposing to operate in IFSC, shall be permitted without undergoing any additional documentation and/or prior approval process," the exchange said in a circular.
The regulator said that stock exchange in IFSC will have maintain, at all times, the necessary details of EFIs, which may be called upon by Sebi or any other authority of law.