FIIs and their agents will have to state that "we undertake that we/our associates have not issued or subscribed/purchased any of the ODIs directly to/from non-resident Indians/resident Indians," the Sebi circular said.
FIIs and their agents have been allowed to issue ODIs such as participatory notes (PNs) against underlying securities to those entities that are not registered with it.
"The circular regarding the undertaking is nothing new as Sebi just wants to track how much money is coming from FIIs and from Indian investors separately. It is basically tightening of the norms of disclosure," said D K Aggarwal, the director of a domestics brokerage, SMC Global. Now, he noted, it will be binding on FIIs to disclose their offshore derivatives investment to NRIs.