SEBI eases KYC compliance norms for FPIs, extends review periods
New Delhi, Oct 30
The Securities and Exchange Board of India on Friday announced a relaxation of know-your-customer compliance requirements for foreign portfolio investors, extending the review cycle for several categories of investors as part of efforts to reduce repetitive regulatory obligations and improve ease of doing business.
The revised framework, which will come into effect from December 1, increases the KYC review periodicity from one year to two years and from three years to eight years for specified categories of FPIs.
Under the new norms, the frequency of KYC reviews will be determined by an FPI's category, regulatory status and the risk classification of its jurisdiction.
For FPIs based in non-high-risk jurisdictions, Category-I investors will be required to undergo KYC reviews once every eight years.
Category-II FPIs that are regulated entities will also be subject to an eight-year review cycle, while other Category-II investors will continue to undergo reviews every two years.
In the case of FPIs located in high-risk jurisdictions, Category-I investors registered under Regulation 5(a)(i), which covers government and government-related entities, will be reviewed every eight years.
Other Category-I investors and all Category-II FPIs in high-risk jurisdictions will be subject to KYC reviews every two years.
SEBI said the review requirements for FPIs investing exclusively in government securities (GS-FPIs) and those registered under the Single Window Automatic and Generalised Access for Trusted Foreign Investors (SWAGAT-FI) framework will remain unchanged.
SWAGAT-FI investors will continue to be subject to KYC reviews every 10 years, while GS-FPIs will follow the review schedule applicable to their bank accounts as prescribed by the Reserve Bank of India (RBI).
The market regulator has also removed the separate requirement for FPIs, except those investing solely in government securities, to report changes in previously submitted information or furnish a no-change declaration at the time of continuation of registration.
In another change, SEBI revised the process for continuation of registration. FPIs seeking to extend their registration for the next three-year block will be required to pay the prescribed fee to their designated depository participant (DDP).
For SWAGAT-FI investors, the registration block will continue to be 10 years. The fee payment must be completed at least 15 days before the expiry of the existing registration period to ensure seamless continuation.
— IANS
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