SEBI PANEL MOOTS CHANGES TO FPI RULES
25, May 2019
Prelims level : Economy Mains level : Technology, Economic Development, Bio diversity, Environment, Security and Disaster Management
Why in News:
- As part of its attempts to streamline the regulations to encourage foreign inflows in the Indian market, the Securities and Exchange Board of India (SEBI) has proposed fast track on-boarding procedure for such investors, apart from a simplified registration process.
- As a key source of capital to the Indian economy, it is important to ensure a harmonised and hassle-free investment experience for international investors and improve transparency.
- The group’s primary objectives were consolidation, simplification, rationalisation and liberalisation
- The group has also recommended pension funds to be considered for Category I FPIs registration, removal of opaque structure and
the review of broad-based conditions for appropriately regulated entities.
- The committee has further proposed a liberalised investment cap under a review of prohibited sectors for foreign investment for FPIs, restriction on Sovereign Wealth Funds (SWFs) for investment in corporate debt securities, and permitting FPIs for off-market transactions.
- The committee has also proposed alignment of regulations for FPIs and Alternate Investment Funds (AIFs) and the harmonisation between investment restrictions in FPI regulations and Foreign Exchange Management Act (FEMA).
- SEBI is the statutory regulator for the securities market in India.
- It was established in 1988 and given statutory powers through the SEBI Act, 1992.
- HQ: Mumbai.
- Purpose: Protect the interests of investors in securities, promote the development of securities market and to regulate the securities market.