Analysis: SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2021

CS Tanveer Singh Saluja | Last updated: 02 February 2022

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Quick Summary

The Securities and Exchange Board of India (SEBI) has introduced amendments to the SEBI (Foreign Portfolio Investors) Regulations, 2019. These new regulations, effective from their publication date, introduce a proviso allowing resident Indian entities, other than individuals, to be constituents of an applicant. This is permitted if they meet specific conditions related to being an eligible fund manager and the applicant being an eligible investment fund, as outlined in the Income Tax Act, 1961 and Income Tax Rules, 1962.

The SEBI has notified a new set of regulations to amend the existing SEBI (Foreign Portfolio Investors) Regulations, 2019 which shall come into force as on the date of its publication in the Official Gazette.

Sr. No.

Amendment

Effect

Substitution: Regulation 4(c)

Non-resident Indians or overseas citizens of India or resident Indian individuals may be constituents of the applicant provided they meet the conditions specified by the Board from time to time:

Provided that resident Indian other than individuals, may also be constituents of the applicant, subject to the following conditions, namely -

i. such resident Indian, other than individuals, is an eligible fund manager of

the applicant, as provided under sub-section (4) of section 9A of the Income Tax Act, 1961 (43 of 1961); and

ii. the applicant is an eligible investment fund as provided under sub-section (3) of section 9A of the Income Tax Act, 1961 (43 of 1961) which has been granted approval under the Income Tax Rules, 1962;

Proviso is added to allow resident Indian other than individuals to become a constituent of applicant subject to conditions prescribed therein.

Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.

The author can also be reached at cstanveersaluja@gmail.com.

FAQ :

These are new regulations issued by SEBI to amend the existing SEBI (Foreign Portfolio Investors) Regulations, 2019, and they came into force upon their publication in the Official Gazette.

Non-resident Indians, overseas citizens of India, or resident Indian individuals can be constituents if they meet specified conditions. Additionally, resident Indian entities, other than individuals, can also be constituents under certain conditions.

The resident Indian entity must be an eligible fund manager as per Section 9A(4) of the Income Tax Act, 1961, and the applicant must be an eligible investment fund approved under the Income Tax Rules, 1962, as per Section 9A(3) of the Income Tax Act, 1961.

The amendment regulations came into force on the date of their publication in the Official Gazette.