SEBI introduced the present Foreign Portfolio Investors (FPIs) Regulations in January 2014 (replacing the erstwhile FII Regulations, 1995) to govern investments made by certain non-residents in the Indian capital markets. In order to rationalise investments made in India under the portfolio investment route, the FPI regulations merged the three categories of investment prescribed under the erstwhile regulations - i.e., FII, sub accounts and qualified foreign investors, into a single category, FPI.
As per the extant regulations, eligible foreign investors registered with SEBI as FPIs under the FPI Regulations are permitted to invest in the Indian capital markets.
The FPI Regulation (2014) has considerably eased the entry norms for FPIs to access the growing Indian Capital Markets.
Over 9000+ FPIs have registered in India with SEBI till end of 2018. India continues to be an attractive investment destination for global investors. The Indian economy continues to offer an attractive investment proposition with tremendous opportunities. The Government of India, SEBI and the Reserve Bank of India (RBI) has undertaken various key reforms and has liberalized the regulations in various sectors of the economy to improve the ease of doing business. Encouraging Foreign Inflows to the secondary market has always received special focus due to the special nature of this investor segment.
Under the SEBI FPI Regulations, 2014, Foreign Institutional Investors (FIIs), sub accounts and Qualified Foreign Investors (QFIs) were merged into a single category, referred to as FPIs. This path breaking Regulation ushers significant and positive changes in accessing the Indian Capital Markets by foreign investors.
Some of the highlights being:
- Risk based categorization of Investors introduced
- Documentation requirements have been eased across all categories with minimalistic requirements for categories I and II
- Reduced Registration fees
- Simplified Know Your Customer norms by SEBI and RBI
- Speedier registration through Designated Depositary Participants (DDPs)
- Investment limits enhanced for specific Investor Categories
Download the full FPI Guide: