Write-off of shares held by FPIs

Last updated: 24 September 2020

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The Securities and Exchange Board of India (SEBI) has updated its operational guidelines for Foreign Portfolio Investors (FPIs). Previously, FPIs could only write off shares of unlisted, illiquid, suspended, or delisted companies when surrendering their registration. Following feedback, SEBI has now permitted FPIs to write off shares of any company that they are unable to sell, provided they follow the specified process.

Securities Exchange Broad of India

CIRCULAR

SEBI/HO/IMD/FPI&C/CIR/P/2020/177

September 21, 2020

To,

1. Foreign Portfolio Investors (“FPIs”)
2. Designated Depository Participants (“DDPs”) and Custodians
3. All Recognized Stock Exchanges/ Clearing Corporations
4. All recognized Stock Exchanges and Clearing Corporations in International
Financial Services Centres
5. The Depositories (NSDL and CDSL)

Dear Sir/Madam,

Subject: Write-off of shares held by FPIs

1. SEBI, vide circular number IMD/FPI&C/CIR/P/2019/124 dated November 05, 2019, had issued an Operational Guidelines for FPIs and DDPs under SEBI (Foreign Portfolio Investors), Regulations 2019.

2. In the said Operational Guidelines, write-off of securities held by FPIs who wish to surrender their registration was permitted only in respect of shares of companies which are unlisted/illiquid/suspended/delisted. However, in view of the requests received from various stake holders, it has been decided to permit said FPIs to writeoff shares of all companies which they are unable to sell. In this regard, the process detailed at para 17 of Part C of the said Operational Guidelines shall be complied with.

3. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992.

4. A copy of this circular is available at the web page “Circulars” on our website www.sebi.gov.in. Custodians are requested to bring the contents of this circular to the notice of their FPI clients.

Yours faithfully,

AMIT TANDON
General Manager
Tel No.: 022-26449373
E-mail: amitt@sebi.gov.in

FAQ :

SEBI has allowed FPIs to write off shares of any company that they are unable to sell, not just those that are unlisted, illiquid, suspended, or delisted.

This circular affects Foreign Portfolio Investors (FPIs), Designated Depository Participants (DDPs), Custodians, Stock Exchanges, Clearing Corporations, and Depositories.

Previously, FPIs could only write off shares of companies that were unlisted, illiquid, suspended, or delisted when they wished to surrender their registration.

FPIs must comply with the process detailed in paragraph 17 of Part C of the Operational Guidelines issued earlier.

A copy of the circular is available on the SEBI website (www.sebi.gov.in) under the 'Circulars' section.

Notification No : SEBI/HO/IMD/FPI&C/CIR/P/2020/177
Source : https://www.sebi.gov.in/legal/circulars/sep-2020/write-off-of-shares-held-by-fpis_47608.html

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