Sebi extends easier processing norms for FPI registrations, citing lockdown

Topics Sebi | FPI norms

A number of custodians recently wrote to the regulator seeking an extension for easier registration guidelines by three months.
Sebi has extended the relaxations provided to foreign portfolio investors (FPIs) and custodians for processing documents related to new investor registrations, if they belong to jurisdictions still under the lockdown.

“In view of representations from various stakeholders, it has been decided that for the entities in jurisdictions still under a lockdown, the temporary relaxations shall be extended till the time the lockdown is lifted,” the regulator said in a release on Monday.

A number of custodians had recently written to the regulator, seeking a three-month extension for easier registration guidelines.

Sebi had earlier allowed custodians to furnish scanned documents instead of originals for FPI registrations, owing to the outbreak. The relaxation was initially till June 30 and later extended to August 31.

Most custodians in Mumbai are also adopting the policy of work-from-home, hampering their ability to access the required documents.
According to the March circular, custodians were allowed to process requests for registration, continuance, KYC review, and other material change on the basis of scanned version of signed documents (instead of originals) as well as copies of documents that were either not certified or received from email IDs of their global custodians’ existing clients. 

All originals and certified documents were required to be submitted within a month of expiry of the relaxed deadline, failing which accounts of FPIs could be blocked for fresh purchase.  The pandemic has taken a toll on FPI registrations in the June quarter with work-from-home, volatility in stock markets worldwide, and redemption pressures prompting investors to defer new investment plans. 

New monthly registrations had averaged above 100 this year till April, before dropping to 40 in the June quarter.

FPI net equity flows have been resilient, with net inflows of nearly Rs 59,000 crore in August — a record for any calendar month. In the previous two months, FPI inflows stood at Rs 29,000 crore.

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