AMCs Can Render Advisory Services To Appropriate Regulated FPIs, Says Sebi

Mumbai, December 18: The market regulator, Securities and Exchange Board of India (Sebi) recently has given permission to the asset management companies (AMCs) to extend the management and advisory services to the regulated foreign portfolio investors (FPIs). “AMCs may provide management and advisory services in terms of Regulation 24(b) of MF Regulations to FPIs falling under the categories of FPIs as specified in FPI Regulations,” read the circular. This may also includes the FPI’s categories that are appropriately regulated entities such as pension funds, insurance, banks and mutual funds.

That said, the AMCs can also provide its services towards government and government-related investors such as central banks, sovereign wealth funds, international or multilateral organisations or agencies that includes entities controlled or at least 75 per cent directly indirectly owned by such government. Also as per Sebi, the government and government-related investors, as well as other regulated investors including pension funds, insurance, banks and mutual funds, should hold more than 50 per cent of shares or units inappropriately regulated FPIs.

Sebi also added that agreements entered by the AMCs on or before the date of this circular or December 16, the AMCs can continue to provide the services, for the period as mentioned in the agreement or one year from the date of this circular, whichever is higher. This new norms would be applicable with the immediate effect, said Sebi. In the month of August 2019, Sebi had approved new regulations for FPIs, with a main focus to simplify and rationalise the existing regulatory framework for FPIs. This included simplified KYC documentation, as well as permitting offshore funds of Indian mutual funds to invest in India post registering as FPI.

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AMCs Can Render Advisory Services To Appropriate Regulated FPIs, Says Sebi

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