Foreign Portfolio Investment SEBI

Foreign Portfolio Investment SEBI
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Foreign Portfolio Investment (FPI) in India is regulated by the Securities and Exchange Board of India (SEBI). FPI refers to investments by foreign entities, such as foreign institutional investors (FIIs), foreign portfolio investors (FPIs), and qualified foreign investors (QFIs), in the Indian securities market. Here are the key aspects related to Foreign Portfolio Investment regulated by SEBI:

### 1. **Regulatory Framework:**
– SEBI governs the FPI regime in India and issues regulations, circulars, and guidelines to facilitate and regulate foreign investments in the Indian capital markets.

### 2. **FPI Categories:**
– SEBI has categorized FPIs into different segments, such as Category I, Category II, and Category III, based on the nature of their activities and the level of regulatory oversight.

### 3. **Eligibility Criteria:**
– FPIs need to meet eligibility criteria specified by SEBI, which may include factors like track record, financial soundness, and compliance with global anti-money laundering (AML) and know your customer (KYC) norms.

### 4. **Registration with SEBI:**
– FPIs are required to register with SEBI through designated depository participants (DDPs). The registration process involves the submission of necessary documents and compliance with regulatory requirements.

### 5. **Know Your Customer (KYC):**
– FPIs need to comply with KYC norms, and they are required to update their KYC information periodically.

### 6. **Investment Limits:**
– SEBI prescribes investment limits for FPIs in various financial instruments such as equity, debt, and derivative instruments.

### 7. **Foreign Investment Limits:**
– SEBI monitors and enforces foreign investment limits set by regulatory authorities for different sectors, including restrictions on investments in certain sensitive sectors.

### 8. **Risk Management and Compliance:**
– FPIs are required to have risk management policies in place and comply with SEBI’s risk management framework.

### 9. **Reporting and Disclosures:**
– FPIs need to comply with reporting requirements and disclose information as required by SEBI. This includes reporting changes in beneficial ownership and other material changes.

### 10. **Participation in Derivatives:**
– FPIs are allowed to participate in the Indian derivatives market, subject to certain conditions and limits.

### 11. **Custodianship:**
– FPIs are required to appoint custodians registered with SEBI for holding and safeguarding their securities.

### 12. **Taxation:**
– FPIs are subject to Indian taxation laws, and tax implications on their investments are an important consideration.

### 13. **Simplification of Regulations:**
– SEBI periodically reviews and updates regulations to simplify and streamline the FPI regime, making it more investor-friendly.

### Note:
– The regulatory framework for FPIs is subject to updates and amendments. It is crucial to refer to the latest SEBI regulations and guidelines for the most accurate information.

Entities seeking to make foreign portfolio investments in India should work closely with SEBI-registered intermediaries, custodians, and legal advisors to ensure compliance with regulatory requirements and navigate the FPI registration process effectively.

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