Terming the Indian markets as amongst the best regulated the Finance Minister announced several measures to strengthen the capital market regulator SEBI on the eve of its Silver Jubilee. The DepositoryParticipants authorized by SEBI will now register different classes of portfolio investors subject to compliance with KYC guidelines doing away with different procedures and avenues for many categories.SEBI will simplify the procedure for the Foreign Portfolio Investors and prescribe uniform registration and other norms by converging the different KYC norms. In order to remove the ambiguity between FDI and FII in accordance with international practices, an investor with a stake of 10% or less will be treated as FII whereas the one with more than 10% stake will be treated as FDI. The FIIs will also be permitted to participate in exchange tradedCurrency Derivatives segments to the extent of their Indian rupee exposure in India. FIIs will also be permitted to use their investments in Corporate Bonds and Government Securities as collateral to meet their margin requirements.

Angel investors provide both experience and capital to new ventures.SEBI will prescribe requirements for angel investor pools by whichthey can be recognized as category I venture funds.

With the objective of developing the debt market, stock exchanges will be allowed to introduce a debt segment on the exchange wherein banks and primary dealers will be trading members alongwith insurance companies, provident funds and pension funds. The list of eligible securities in which Pension Funds and Provident Funds may invest will be enlarged to include exchange traded funds, debt mutual funds and asset backed securities.

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DSM/PP/SK/69

(Release ID :92745)

Foreign portfolio investor registration simplified with uniform KYC, expanded derivatives participation and collateralised margining. Registration and KYC for non-resident portfolio investors are to be unified under depository participants and SEBI with converged norms; investor classification by stake is clarified to distinguish portfolio investment from direct investment. Portfolio investors are permitted to access exchange-traded currency derivatives within their domestic exposure and may use investments in corporate bonds and government securities as collateral to meet margin requirements. SEBI will also set recognition criteria for angel investor pools as Category I venture funds, and exchanges may create debt segments with broadened eligible investments for pension and provident funds.