After NRI investments in domestic market, foreign funds on Sebi radar

Regulator asks custodians to provide end-beneficiary data of foreign funds with Indian ownership

A fortnight after the market regulator tightened rules around non-resident Indian (NRI) investments in the  domestic market, several foreign funds have come under the scrutiny of the Securities and Exchange Board of India (Sebi). 

According to sources, the regulator has sought investment and end-beneficiary-related information of foreign portfolio investors (FPIs) from their custodians. Sebi wants to crack down on those NRI-managed funds that are also used to channel money belonging to persons of Indian origin (PIO).

Sebi’s FPI regulations prohibit any foreign fund from being controlled by a PIO or NRI. Such entities are allowed to obtain an FPI licence