Operational Guidelines for Designated Depository Participants

Designated Depository Participant obligations: DDPs must register and monitor foreign portfolio investors and enforce eligibility and group investment limits.

The circular mandates that each FPI engage a Designated Depository Participant (DDP) and that the DDP and the FPI's Custodian be the same entity; DDPs must scrutinise Form A applications against a checklist of eligibility and fit and proper criteria, may grant conditional Category II registrations subject to broad based undertakings and 180 day confirmation, and must manage surrender, name changes, DDP transfers and material changes. DDPs must obtain investor group declarations and report to depositories to ensure clubbing of investment limits so aggregate group holdings remain below the prescribed limit, and must implement tax deduction/payment mechanisms and procedures for post expiry disinvestment permissions.