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To attract more capital inflows, a panel appointed by Sebi today suggested a slew of measures including simplified registration process for foreign investors and classifying them into a single category.
Besides, the committee headed by former Cabinet Secretary K M Chandrasekhar, also suggested that Know Your Client (KYC) rules should be based on the risk profile of investors.
The recommendations from the panel come at a time when the government is exploring ways to lure more foreign capital into the country and strengthen the falling rupee.
According to the committee, single overseas investments of more than 10% in a company should be considered as Foreign Direct Investment while those less than 10% should be classified as foreign portfolio investment.
Existing FIIs, Sub Accounts and Qualified Foreign Investors (QFI) should be merged into a new investor class called 'Foreign Portfolio Investor' (FPI).
"In a significant move to make the procedure much simpler, the Committee recommended that prior direct registration of FIIs and Sub Accounts with Sebi should be done away with," Sebi said in a release today.
Instead, the new class of investors (FPIs) should be allowed to register themselves with Designated Depository Participants (DDPs).
The committee on 'rationalisation of investment routes and monitoring of foreign portfolio investments' said that KYC norms for investors should be based on their risk profiles.
