For the ease of doing business, market regulator Securities and Exchange Board of India (SEBI) announced the simplification of process for onboarding Foreign Portfolio Investors (FPIs). The steps are taken to ease the onboarding process of FPIs and reducing the time taken for granting registration and opening of demat, trading and bank accounts of FPIs.
According to a circular issued by the market regulator, FPI registration can now be granted by designated depository participants (DDPs) using scanned copies of application forms and other supporting documents.
SEBI said the circular will be applicable with immediate effect.
The registry has been allowed registration based on scanned copies, however, trading still cannot be conducted without physical verification. Before the amendment, in order to obtain FPI registrations, applicants were required to send scanned copies of their application forms and supporting documents as well as physical copies.
SEBI has also permitted DDPs to accept digital signatures from FPIs for documents relevant to registration. Moreover, the regulator has allowed DDPs to verify PAN through the Common Application Form (CAF) module on their websites. At present, a hard copy of the PAN must be provided by the applicant for DDPs to verify the PAN.
As per the notification, Sebi has now allowed authorized bank officials to use the SWIFT mechanism for certifying copies of original documents submitted by FPIs in an effort to reduce physical movement of documents and time taken for registration.
According to Sebi, if an FPI applicant is a member of an existing FPI investor group, it may provide its specific FPI investor group ID in the CAF without having to provide comprehensive details for operational convenience.
Currently, an FPI applicant, at the time of registration, is required to provide details of FPIs with whom it shares 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.
