Sebi Proposes New Role for Resident Indians in FPIs Framework

Sebi has proposed new measures to enhance the participation of resident Indians in the Foreign Portfolio Investors framework. The proposition includes allowing non-individual Indians to play a more significant role in international investment structures and the potential registration of retail schemes in IFSCs. Public comments are invited till August 29.

The Securities and Exchange Board of India (Sebi) has introduced a new proposal to bolster the involvement of resident Indians within the Foreign Portfolio Investors (FPIs) framework.

A key aspect of the proposal is the enhancement of roles for Indian non-individuals and mutual funds in global investment structures. Sebi's consultation paper suggests enabling retail schemes in India's International Financial Services Centres (IFSCs) with Indian non-individual sponsors or managers to register as FPIs. Furthermore, the term 'sponsor or manager' would be updated to 'Fund Management Entity (FME) or its associate.'

The proposal also outlines that such Indian non-individuals, acting as FMEs or their associates in Alternative Investment Funds (AIFs) and retail schemes in IFSCs, may contribute up to 10 percent of the fund's assets. Meanwhile, overseas funds registering as FPIs might include Indian mutual funds. Stakeholders have until August 29 to submit their comments.

(With inputs from agencies.)