Sebi panel sweetens deal for FPIs

The committee also clarified that an senior management control of fund can rest with anyone including NRI, PIO or FPI.

Addressing another the key concern of the NRIs, the committee has said a single NRI could own up to 25 per cent and NRIs put together can own up to 50 per cent in a foreign fund.

However, the committee reiterated the current regulatory stance that no NRI can be BO of an FPI, however, they can act as investment advisors.

Another key takeaway from the report is the exemption given to PIOs from controlling an FPI. The April 10 circular had said no PIO could control an FPI. However, since PIOs are citizens of other countries, Sebi has brought them on a par with foreign nationals in terms of FPI ownership.

The panel has recommended that FPIs who are non-complaint with the KYC circular will be give 180 days to divest their holdings.

The move will give FPIs ample time to realign their holdings to comply with the new requirements, said experts.

The panel has also proposed relaxation to FPIs from providing sensitive information such as social security number.

The Khan panel also clarified that the norms would also apply to participatory notes (p-notes)—also called offshore derivative instruments.