Consultation Paper on permitting increased participation of NRIs and OCIs into SEBI registered FPIs based out of IFSCs


SEBI has issued a Consultation Paper on permitting increased participation of Non –Resident Indians (NRIs) and Overseas Citizens of India (OCIs) into SEBI registered Foreign Portfolio Investors (FPIs)based out of International Financial Services Centres (IFSCs) in India and regulated by the International Financial Services Centres Authority (IFSCA) to enhance investments by FPIs in India by facilitating increased participation from NRIs and OCIs as constituents of FPIs that are based out of IFSCs in India and regulated by IFSCA, while putting in place adequate measures to mitigate the risks emanating from such investments.

The following framework is proposed for channelizing NRI/ OCI investments in the Indian securities markets through the FPI route:

  1. The contribution of a single NRI or OCI or RI shall be below twenty-five percent of the total contribution in the corpus of the applicant.
  2. At an aggregate level, NRIs and OCIs may be allowed to contribute fifty percent or more to the corpus of an FPI.
  3. NRIs/ OCIs identified as BOs of the FPI shall be required to provide passport no. / OCI no. respectively to their DDPs.
  4. FPIs/ FPI applicants based out of IFSCs in India and regulated by IFSCA, that are desirous of having more than 50% aggregate contribution from NRIs/ OCIs in their corpus, may opt to do so by submitting declaration in this regard to their DDPs. Such declaration may be submitted at the time of seeking registration or anytime during the validity of their registration. Once a FPI submits such declaration, it shall comply with the aforementioned conditions throughout the validity of its registration, irrespective of the actual aggregate NRI/ OCI contribution in the corpus of the FPI.

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