Market regulator Sebi has said existing foreign investors applying for conversion to new class of investor category, FPIs, will have to update their Know Your Clients (KYC) details by the end of December.
Foreign Portfolio Investors (FPIs) would encompass all foreign institutional investors (FIIs), their sub-accounts and qualified foreign investors (QFI) under a new regime that comes into force on June 1.
All the existing overseas investor classes such as FIIs, sub-accounts and QFIs will have to convert to the new regime eventually.
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"The existing EFI (eligible foreign investors)clients applying for conversion as FPIs between June-December, 2014 shall update their KYCs latest by December 31, 2014," as per information available with the Securities and Exchange Board of India (Sebi).
"However, from January 1, 2015, all EFIs, coming up for conversion as FPI, must update their KYCs at the time of submission of documents to the DDPs (designated-depository participants)," it added.
Existing clients or EFIs mean all foreign investors were registered with Sebi/Qualified Depository Participants up to September 12 this year.
Under the new norms, Sebi approved DDPs would grant registration to FPIs on behalf of the regulator and carry out other allied activities in compliance with regulations.
The new regime divides FPIs into three categories as per their risk profile and the KYC (know your client) requirements and other registration procedures would be simpler.
Category-I FPIs (lowest risk category) would include foreign governments and government-related foreign investors.
Category-II FPIs include appropriately regulated entities, broad-based funds whose investment manager is appropriately regulated, university funds, university-related endowments and pension funds.
Category-III FPIs would include all others not eligible under the first two categories.