{"id":27592,"date":"2018-10-23T14:56:23","date_gmt":"2018-10-23T09:26:23","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=27592"},"modified":"2018-10-23T14:56:23","modified_gmt":"2018-10-23T09:26:23","slug":"fpis-start-process-of-falling-in-line","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/fpis-start-process-of-falling-in-line\/","title":{"rendered":"FPIs start process of falling in line"},"content":{"rendered":"<p><a href=\"https:\/\/www.thehindu.com\/business\/fpis-start-process-of-falling-in-line\/article24896521.ece\">FPIs start process of falling in line<\/a><\/p>\n<p><strong>News:<\/strong><\/p>\n<p>1.Foreign funds across the globe which invest in Indian equity markets, have started restructuring their ownership and management structure to comply with the SEBI\u2019s diktat.<\/p>\n<p><strong>Important facts:<\/strong><\/p>\n<ol start=\"2\">\n<li><u>Background:<\/u><\/li>\n<\/ol>\n<ul>\n<li>There are more than 9,100 FPIs registered with SEBI.<\/li>\n<li>FPIs own securities worth atleast $425 billion in Indian equities.<\/li>\n<li>Most FPIs are from USA, Mauritius, Singapore and Luxembourg.<\/li>\n<li>Many FPIs have NRIs or PIOs listed as fund manager\/beneficial owners.<\/li>\n<li>On April 10th, SEBI issued new structural guidelines for FPIs of certain category.<\/li>\n<\/ul>\n<p><u>2. Issue:<\/u><\/p>\n<p>New guidelines restrict NRIs and PIOs from being fund managers or beneficial owners (BO) in India-focused overseas funds.<\/p>\n<ul>\n<li>A company with majority stakes owned by NRIs or PIOs will not be allowed to invest as a foreign portfolio investor (FPI) in the country.<\/li>\n<li>The existing FPIs, not in conformity with the new rules, are now required to change or close their existing position in Indian securities and provide the relevant documents.<\/li>\n<li>Any change in the position of fund manager will require an approval from all its off-shore investors.<\/li>\n<\/ul>\n<p><u>3. Who is Beneficial owner:<\/u><\/p>\n<ul>\n<li>Under the PMLA, \u00a0BO is defined as \u201ca persons who has a controlling ownership interest in the FPI or control over the FPI\u201d.<\/li>\n<li>If a BO cannot be directly identified, the senior managing official of the FPI is assumed to be the BO.<\/li>\n<\/ul>\n<p>4.\u00a0<u>Impact of new guidelines:<\/u><\/p>\n<ul>\n<li>As per Asset Management Roundtable of India (AMRI), a lobby group, the new FPI norms will immediately impact investments of about $75 billion from overseas funds.<\/li>\n<li>Industry experts believe that the private equity industry will see only a limited impact. Any significant impact, if possible, is expected only in public markets.<\/li>\n<li>SEBI denied of any significant impact on FPI investments.<\/li>\n<li>However, it can not be denied that new guidelines require the foreign investors to go through a serious structural overhauling.<\/li>\n<li>It also restricts NRIs\/PIOs from holding key managerial position in FPIs.<\/li>\n<\/ul>\n<p><u>5. Remedial measures:<\/u><\/p>\n<ul>\n<li>SEBI had formed a committee under the chairmanship of former deputy governor of RBI, H.R. Khan to review the FPI rules.<\/li>\n<li>The panel will also look into the issues raised by the investors in relation to new guidelines.<\/li>\n<\/ul>\n<p><u>6. Way forward:<\/u><\/p>\n<p>SEBI needs to take a holistic view after taking into account views of all stakeholders, including the government.<\/p>\n<ul>\n<li>Any attempt to weed out people behind corporate entities shall not result into filtering of money managed by NRIs or PIOs.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>FPIs start process of falling in line News: 1.Foreign funds across the globe which invest in Indian equity markets, have started restructuring their ownership and management structure to comply with the SEBI\u2019s diktat. Important facts: Background: There are more than 9,100 FPIs registered with SEBI. FPIs own securities worth atleast $425 billion in Indian equities.&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/fpis-start-process-of-falling-in-line\/\">Continue reading <span class=\"screen-reader-text\">FPIs start process of falling in line<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-27592","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704864441},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/27592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=27592"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/27592\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=27592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=27592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=27592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}