Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 3.5
Article rating: 5.0
Article rating: No rating
Article rating: 4.0
Article rating: No rating
Article rating: No rating
Article rating: 5.0
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: 5.0


Sebi puts in place detailed framework on beneficial owners of FPIs

Author: PTI/Wednesday, April 11, 2018/Categories: Regulatory

Sebi puts in place detailed framework on beneficial owners of FPIs

New Delhi - Markets regulator Sebi today came out with a detailed framework in order to identify and verify beneficial owners of foreign portfolio investors (FPIs).

Beneficial owner (BO) is the natural person, who ultimately owns or controls an FPI.

Under the framework, beneficial ownership of FPIs having structure of company or trust should be identified on controlling ownership interest and control basis.

In case of partnership firm and unincorporated association of individuals, BOs should be identified on ownership or entitlement basis, the Securities and Exchange Board of India (Sebi) said in a circular.

In order to bring consistency, Sebi has asked Category II and III FPIs to provide list of their BOs in a prescribed format.   

Besides, they need to disclose to Sebi about name and address of the beneficial owner; whether they are acting alone or together through one or more natural persons as group, with their name and address; tax residency jurisdiction; BO group's percentage shareholding capital or profit ownership in the FPIs.

According to Sebi, this list should be certified by FPI and such overseas investors should also certify that there are no other BOs other than those referred in list.

The existing FPIs should provide the list of BOs within six months.

The regulator said that non resident Indians (NRIs), overseas citizen of India (OCI) cannot be BO of FPIs. However, if an FPI is Category II Investment manager of other FPIs and is non-investing entity, it may be promoted by NRIs or OCIs. Further, it said that that resident Indian cannot be a BO of FPI.

Clarifying on KYC documentations required for category III FPIs, which are high risk investors, Sebi said that audited annual financial statement or a certificate from auditor certifying networth need to be obtained from such overseas investors.

In case of new funds, companies, family offices, the audited financial statement of promoter person may be obtained.

In respect of exempted documents, concerned FPIs should submit an undertaking to designated depository participant, custodians that upon demand by regulators or law enforcement agencies, the relevant documents would be provided. Further, since category III FPIs are high risk investors, Sebi said that 'declaration on letter head' be provided by them.

Such high risk investors have been exempted from furnishing certain supporting KYC documents depending on risk involved.

In a major revamp, Sebi in 2014 had released norms that had clubbed different categories of foreign investors into a new class called FPIs.

Under the regime, FPIs have been divided into three categories as per their risk profile and the KYC (know your client) requirements, while other registration procedures have been made simpler for them.

Print Rate this article:
No rating

Number of views (150)/Comments (0)

rajyashree guha


Other posts by PTI
Contact author

Leave a comment

Add comment



Ask the Finapolis.

I'm not a robot
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest



The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free