In a bid to reduce the physical movement of documents and the time taken for registration, SEBI has allowed authorized bank officials to use SWIFT mechanism for certification of copies of original documents submitted by FPIs
Markets regulator SEBI on Monday simplified the procedural requirements for onboarding of Foreign Portfolio Investors (FPIs) in a bid to facilitate ease of doing business and to reduce the time taken for their registration. The regulator allowed designated depository participants (DDPs) to grant FPI registration on the basis of scanned copies of application forms and supporting documents, according to a circular.
Granting of registration on the basis of scanned copies has been allowed but trading can only be activated following the verification of the physical documents, it said. At present, applicants are required to send both scanned copies as well as physical documents of application forms and supporting documents to the DDPs for obtaining the FPI registration.
In addition, the Securities and Exchange Board of India has allowed DDPs to accept the use of digital signatures by FPIs for the execution of registration-related documents. Besides, the regulator has permitted verification of PAN by DDPs through the Common Application Form (CAF) module available on the websites of the depositories. Currently, DDPs can verify the PAN only after receiving a hard copy of the PAN from the applicant.
In a bid to reduce the physical movement of documents and the time taken for registration, SEBI has allowed authorized bank officials to use SWIFT mechanism for certification of copies of original documents submitted by FPIs, it said. These moves are aimed at easing the onboarding process of FPIs and reducing the time taken for granting registration as well as opening of demat, trading and bank accounts of FPIs, the SEBI said.
For operational convenience, SEBI said in case an FPI applicant belongs to an existing FPI investor group, it may submit its unique FPI investor group ID in the CAF, in lieu of providing complete details of all group constituents. In case the applicant wants to club additional FPIs (apart from itself) in such unique investor group ID, the FPI only needs to provide details of such additional FPIs, along with the investor group ID, it said.
Currently, an FPI applicant, at the time of registration, is required to provide details of FPIs with whom it share ownership of more than 50 percent or common control. Depositories in turn generate a unique FPI investor group ID for identifying each such FPI investor group.
The circular, which will be applicable with immediate effect, came after SEBI's board in its meeting in December 2022 approved the simplification of certain procedural requirements for on boarding of FPIs. Earlier this month, SEBI made stringent norms for FPIs asking them to disclose any material change in their structure and common ownership within seven working days. With regard to new FPI registrations, the regulator can ask them for any additional documents which may be required.