Modification in Operational Guidelines for FPIs and DDPs pursuant to amendment in SEBI (Foreign Portfolio Investors) Regulations, 2019

Last updated: 05 August 2021

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The Securities and Exchange Board of India (SEBI) has modified its operational guidelines for Foreign Portfolio Investors (FPIs) and Designated Depository Participants (DDPs). These changes align with the recent amendment to the SEBI (Foreign Portfolio Investors) Regulations, 2019. The update clarifies how resident Indian fund managers can benefit from Section 9A of the Income Tax Act, 1961, and specifies that resident Indian individual contributions must be made via the Liberalised Remittance Scheme (LRS) for global funds with less than 50% Indian exposure.

Securities and Exchange Board of India Circular SEBI/ HO/ FPIC/ P/ CIR/ 2021/ 609 Dated: August 04, 2021 To 1. Foreign Portfolio Investors (FPIs) 2. Custodians and Designated Depository Participants (DDPs) 3. The Depositories (NSDL and CDSL) All recognized Stock Exchanges and Clearing Corporations Dear Sir/ Madam, Sub: Modification in Operational Guidelines for FPIs and DDPs pursuant to amendment inSEBI (Foreign Portfolio Investors) Regulations, 2019 1. Section 9A

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FAQ :

The circular modifies the operational guidelines for FPIs and DDPs to reflect amendments made to the SEBI (Foreign Portfolio Investors) Regulations, 2019.

The SEBI (Foreign Portfolio Investors) Regulations, 2019, have been amended, specifically clause (c) of Regulation 4.

Section 9A was introduced to facilitate fund management activities in India for offshore funds and allows resident Indian fund managers to benefit from its provisions.

Resident Indian individuals must contribute through the Liberalised Remittance Scheme (LRS) notified by the Reserve Bank of India.

The Indian exposure of global funds must be less than 50% for contributions from resident Indian individuals.

DDPs and Custodians are requested to inform their clients about the contents of this circular.

Notification No : Circular No. SEBI/ HO/ FPI&C/ P/ CIR/ 2021/ 609
Source : https://www.sebi.gov.in/legal/circulars/aug-2021/modification-in-operational-guidelines-for-fpis-and-ddps-pursuant-to-amendment-in-sebi-foreign-portfolio-investors-regulations-2019_51628.html

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