Market regulator Sebi on Tuesday said foreign investors from Mauritius will continue to be eligible for FPI registration with increased monitoring as per international norms.
The announcement comes after the tax haven was put on the grey list' of Financial Action Task Force (FATF) -- an inter-governmental policy making body that sets anti-money laundering standards.
A significant percentage of foreign portfolio investors (FPIs) investing in the Indian market is registered in Mauritius.
Following the FATF notice, some fund managers knocked on Sebi's door overnight, raising concerns over validity of FPI registration done through the tax haven.
The regulator on Tuesday said, "Foreign investors from Mauritius will continue to be eligible for FPI registration with increased monitoring as per FATF norms".
For several years, there have been apprehensions about Mauritius being a money laundering route for FPIs due to its limited regulatory oversight. But, the Indian Ocean island nation has been taking several steps in recent years to address the concerns.