Reclassification of foreign portfolio investment to FDI permits conversion after prescribed approvals and reporting, enabling continued FDI treatment. The framework permits FPIs exceeding the prescribed limit to reclassify holdings to FDI subject to obtaining applicable Government approvals, investee company concurrence, and adherence to FDI entry conditions and sectoral caps. The FPI must notify its Custodian, which freezes purchases until reclassification; complete prescribed reporting (FC-GPR for fresh issuance, FC-TRS for secondary-market acquisition) and AD bank LEC reporting; and then request custodial transfer of securities from the FPI demat to the FDI demat. The date causing the breach is the date of reclassification and the holding thereafter is treated as FDI.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Reclassification of foreign portfolio investment to FDI permits conversion after prescribed approvals and reporting, enabling continued FDI treatment.
The framework permits FPIs exceeding the prescribed limit to reclassify holdings to FDI subject to obtaining applicable Government approvals, investee company concurrence, and adherence to FDI entry conditions and sectoral caps. The FPI must notify its Custodian, which freezes purchases until reclassification; complete prescribed reporting (FC-GPR for fresh issuance, FC-TRS for secondary-market acquisition) and AD bank LEC reporting; and then request custodial transfer of securities from the FPI demat to the FDI demat. The date causing the breach is the date of reclassification and the holding thereafter is treated as FDI.
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