Foreign Portfolio Investors

FPIs prohibited from executing Non-Disposal Undertakings

On March 14, 2018, SEBI issued an informal guidance to UBS AG (“Applicant”), a SEBI registered FPI, clarifying the position on whether non-disposal undertakings (“NDU’s”) constitute an ‘encumbrance’ under the SEBI (Foreign Portfolio Investors) Regulations, 2014 (“FPI Regulations”). Regulation 32(2)(d) of the FPI Regulations imposes an obligation on the designated depository participant engaged by an…

SEBI tightens norms applicable to issuance of Offshore Derivative Instruments

Foreign Portfolio Investors registered under the SEBI (FPI) Regulations, 2014, are permitted to issue offshore derivative instruments (ODIs) and participatory notes (P-Notes) to overseas investors who seek to invest in the Indian securities market without registering as an FPI. While the issuance of ODIs is governed by stringent norms within regulation 22 of the FPI…

SEBI Circular on Offshore Derivative Instruments

The Third SIT Report on Black Money had recommended that SEBI establishes a disclosure mechanism for subscribers of Offshore Derivative Instruments, to ensure that, the names of the ultimate beneficial owners or promoters/directors who controlled the entities which subscribed to ODIs were adequately disclosed. The SEBI (Foreign Portfolio Investors) Regulations, 2014 and the subsequent circulars…

FPIs and Offshore Derivative Instruments

Until now only certain categories of FPIs under the SEBI (FPI) Regulations, 2014, were permitted to subscribe to, or otherwise deal in, offshore derivative instruments if, the counterparty in such transactions was regulated by an appropriate foreign regulatory authority. However, the meaning of the phrase ‘regulated by an appropriate foreign regulatory authority’ was ambiguous. Although…

© Finsec Law Advisors | 2019
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