SOP for FPI custodians on the cards to remove regulatory arbitrage

Sebi move will also discourage DDP shopping

The Securities and Exchange Board of India (Sebi) is in the process of issuing a standard operating procedure (SOP) for designated depository participants (DDPs) regarding disclosures and onboarding of foreign portfolio investors (FPIs), according to a regulatory document seen by Business Standard.
 

DDPs act as a link between the markets regulator and overseas investors.
 

The SOP, framed in consultation with the industry, aims to bring consistency across all players and avoid any form of regulatory arbitrage. This assumes significance as the new disclosure norms aimed at certain FPIs will become operational soon. Experts are of the opinion that the move