Regulatory Update: SEBI- Investment by Foreign Portfolio Investors (FPI) through primary market issuances

SEBI (Foreign Portfolio investors) Regulations, 2014 (“Regulation”) mandated that the purchase of equity shares of each company by a single portfolio investor or an investor group shall be below 10 (ten) percent of the total issued capital of the company. Further the Regulation required that in case the ultimate beneficial owner(s) invest through multiple entities, such entities shall be treated as part of the same investor group and the investment limits of all the entities shall be clubbed as applicable to a single portfolio investment.

SEBI through this circular IMD/FPIC/CIR/P/2018/114 dated 13 July 2018 has ensured compliance of the above, at the time of allotment during primary market issuances. The Registrar and Transfer Agents (RTAs) shall:

  • Use Permanent Account Number (PAN) issued by Income Tax Department of India for checking compliance for a single portfolio investor; and
  • Obtain the validation from the depositories for the foreign portfolio investor who have invested in the particular primary market issuance to ensure there is no breach of the investment limit.

Further the circular also mandates for the depositories to put in place the necessary systems for sharing information with RTAs within the timelines for issue procedure, as prescribed by SEBI.

(Source: https://www.sebi.gov.in/legal/circulars/jul-2018/investment-by-foreign-portfolio-investors-fpi-through-primary-market-issuances_39539.html )

Similar Articles

Sometimes talking gives solution

Contact us for more information about our services and how we can help

Contact
Disclaimer

As per the rules of the Bar Council of India, we are not permitted to advertise or solicit work. By accessing and browsing through this website, all users agree and acknowledge that the content of this website is for informational purposes only and that there has been no form of solicitation, advertisement or inducement by NovoJuris Legal or its members, in any form. No information provided on this website should be construed as legal advice and NovoJuris Legal shall not be liable for consequences of any action taken by relying on the information provided on this website.