TaxTMI 
TaxTMI 
Mandating additional disclosures by Foreign Portfolio Investors (FPIs) that fulfil certain objective criteria
X X X X Extracts X X X X
X X X X Extracts X X X X
....e criteria A. Background: 1. Certain FPIs have been observed to hold concentrated portion of their equity portfolio in a single investee company/ corporate group. Such concentrated investments raise the concern and possibility that promoters of such investee companies/ corporate groups, or other investors acting in concert, could be using the FPI route for circumventing regulatory requirements such as that of disclosures under Substantial Acquisition of Shares and Takeovers Regulations, 2011 (SAST Regulations) or maintaining Minimum Public Shareholding (MPS) in the listed company. 2. Recognizing the inherent risks of opportunistic takeover/ acquisition of Indian companies, the Government of India (GoI) issued Press Note 3 (PN3) dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oreign Portfolio Investors) (Second Amendment) Regulations, 2023, notified on August 10, 2023. 5. In terms of Regulations 22 (6) and 22 (7) of the FPI Regulations, the criteria rendering FPIs liable to provide information or documents in relation to the persons with any ownership, economic interest, or control, in the FPI, and the manner for providing the same is being specified in the below sections of this circular. 6. While the broad principles for this purpose are being outlined in this circular, the detailed mechanism for independently validating conformance of FPIs with the conditions and exemptions mentioned in the circular shall be spelt out in the Standard Operating Procedure (SOP) that shall be framed and adopted by all the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nterest by Government or Government related investors, etc. may not pose significant systemic risk. Further, certain genuine circumstances may also prevent some FPIs from adhering to the limits specified in Para 7 above. Considering the same, FPIs satisfying any of the criteria listed below shall not be required to make the disclosures as specified in Para 7 above: a. Government and Government related investors registered as FPIs under Regulation 5 (a) (i) of the FPI Regulations. b. Public Retail Funds ('PRFs') as defined under Regulation 22(4) of the FPI Regulations, subject to independent validation of the same by DDPs/ Custodians. c. Exchange Traded Funds (with less than 50% exposure to India and India-related ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....st 90 calendar days from the date of settlement of first trade by the FPIs in equity segment in India. g. FPIs in the process of winding down their investment and having intimated to their DDP, their intention to surrender their FPI registration. Such FPIs shall be required to bring down their holdings to 'NIL' within 180 calendar days from the date of their intimation for surrender, failing which the account of the FPI shall be blocked for purchase as well as sale, and the FPI shall be liable for regulatory action as stipulated by the Board. The modalities for compliance with the above shall be detailed in the above referred SOP. 9. The constituents of FPI investor group which collectively hold more than INR 25,000 cro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dian corporate group, during the next 30 calendar days from the date on which the FPIs exceeded the threshold. b. FPIs, including their investor group, holding more than INR 25,000 crore of equity AUM in the Indian markets: 90 calendar days from date on which such FPIs exceed the threshold. Accounts of all FPIs, individually or belonging to such investor group, shall be blocked for further equity purchases until the holding is brought below INR 25,000 crore of equity AUM in the Indian markets. c. FPIs required to make disclosures specified in Para 7 above as on the date of applicability of this circular: 90 calendar days from the date of applicability of this circular. After realignment, in case the FPI's holdings excee....