SEBI allows NRI, OCI participation in IFSC-based FPIs to bolster investments in India

According to the new regulations issued by SEBI, FPIs operating from IFSCs can now gather up to 100 percent of their corpus from contributions by non-resident Indians (NRIs), Overseas Citizens of India (OCIs), and Resident Indians (RIs), reported Economic Times.

This initiative aims to boost participation from NRIs and OCIs in Indian securities markets, addressing long-standing demands to attract more investments from these groups.

Finance Minister Nirmala Sitharaman, in her July 2019 budget speech, emphasized the need to increase NRI investments in Indian capital markets, despite India being a top recipient of global remittances.

Under the amended rules, FPI applicants must declare at registration that at least 50 percent of their corpus will come from NRIs, OCIs, and RIs.

Existing FPIs have six months from the date of the circular to comply with this requirement, with the declaration subject to review during registration renewal.

The new regulatory framework also requires the submission of PAN cards and economic interest details of all NRI/OCI/RI contributors at the time of registration.

For those without a PAN, applicants must provide declarations confirming their non-eligibility for PAN or taxable income in India.

If NRIs/OCIs/RIs control non-individual constituents or hold majority ownership, appropriate PAN or declarations and identity documents are required.