Free Press Journal

Sebi asks depository participants to share FPI info with banks


Mumbai: Market regulator Sebi today asked designated depository participants to share information about foreign portfolio investors with banks, as part of efforts to harmonise KYC (Know Your Client) norms.

KYC documents of Foreign Portfolio Investors (FPIs) can be shared only after getting authorisation from them.

The latest move is part of Sebi’s efforts to harmonise KYC norms with that of the Reserve Bank of India (RBI).

Sebi-approved depository participants are responsible for granting registration to FPIs under the new framework.

“DDPs (Designated Depository Participants) are advised to share the relevant KYC documents with the banks concerned based on written authorisation from the FPIs,” the Securities and Exchange Board of India (Sebi) said in a circular.

Accordingly, a set of hard copies of the KYC documents furnished by the FPIs to DDPs may be transferred to the concerned bank through their authorised representative.

While transferring such documents, DDPs will have to certify that the documents have been duly verified with the original. In this regard, a proper record of transfer of documents, both at the level of the DDP as well as at the bank, under signatures of the officials of the transferor and transferee entities, may be kept.

Under the new norms, FPIs have been divided into three categories as per their risk profile and the KYC (Know Your Client) requirements and other registration procedures would be much simpler for FPIs compared to current practices.

The Category I FPIs, which would be the lowest risk entities, would include foreign governments and government related foreign investors.

Category II FPIs would include appropriately regulated broad based funds, appropriately regulated entities, broad-based funds whose investment manager is appropriately regulated, university funds,university related endowments, pension funds, etc.

The Category III FPIs would include all others not eligible under the first two categories.