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The Securities and Exchange Board of India (Sebi) has relaxed the timeline for foreign portfolio investors (FPIs) for reporting and disclosing material changes.
The regulator has also notified norms for FPIs whose registration has lapsed to liquidate their holdings in the domestic market.
Material changes categorised as Type 1 such as restructuring, change in jurisdiction, merger or acquisition-related changes, impact on exemptions granted to the FPI and the change in any privileges will have to be disclosed within seven working days of the occurrence of the change while the supporting documents will have to be provided within 30 days.
Earlier, many material disclosures were mandated to be disclosed as soon as possible. Legal experts said that the seven-day period is a relief to FPIs.
With the amended norms, Sebi has specified the material changes into two categories. The type 1 category of material changes has more urgency in reporting than type 2.
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While Sebi has specified a 14-point list for type 1 material changes, all other changes will fall under Type 2 category and will be required to be reported within thirty days with supporting documents.
Certain type 1 changes will trigger fresh registration for FPIs.
In the framework for FPIs whose registration is not valid, Sebi has provided a window of 360 days to sell their holdings in India and wind up their open positions in the derivatives.
As of June 2023, 55 FPIs whose registration had expired held around Rs 3,300 crore worth of securities in their demat accounts.
“A foreign portfolio investor whose certificate of registration is not valid and has not sold off the securities or wound up their open position in derivatives in India as per the provisions of these regulations shall be deemed to have written off the securities in such manner as may be specified by the board from time to time,” said Sebi.
The market regulator has also provided a provision for such FPIs to register after paying the late fee.
