TaxTMI 
TaxTMI 
TaxTMI 
Operational Guidelines for Foreign Venture Capital Investors (FVCIs) and Designated Depository Participants (DDPs)
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.... form of operational guidelines (Annexure-1). 3. The provisions of this circular shall come into force with effect from January 01, 2025. 4. This Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulations 3, 8, 9, 10, and 15 of FVCI Regulations to protect the interest of investors in securities and to promote the development of, and to regulate the securities market. 5. This Circular is available at www.sebi.gov.in under the link "Legal ---Circulars". Yours faithfully, Manish Kumar Jha Deputy General Manager Tel No.: 022-26449219 E-mail: [email protected] Encl: Annexure-1 Annexure-1 Operational Guidelines for Foreign Venture Capital Investors These operational guidelines ("guidelines") for Foreign Venture Capital Investors ("FVCIs") and Designated Depository Participants ("DDPs") are issued to facilitate smooth transition to the amended FVCI regime and operationalisation of the amended provisions of SEBI (Foreign Venture Capital Investors) Regulations, 2024 (FVCI Regulations"). Chapter 1 - Registration of Foreign Venture Capital Investors 1. Processing of FVCI application....
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....f Existing FVCI data to DDP 1.3.1 Upon engagement by an FVCI, the DDP may seek transfer of registration related information of the FVCI from SEBI. 1.4 Processing of application for registration by DDPs 1.4.1 FVCI applicant shall submit duly filled application form (Form-A) supported by required documents and applicable fees. The application form in original should be duly signed. If an application form is incomplete, or lacks clarity, the applicant shall be advised by the DDP to clarify or furnish the desired information within a reasonable time. 1.4.2 DDPs shall consider the following checks for determination of eligibility at the time of processing FVCI application: 1.4.2.1 Country Check - The residency status of the FVCI applicant maybe ascertained from the place of incorporation/ establishment through an appropriate document or information such as any identification / registration document issued by applicable regulator or the Income Tax authority. For due diligence, DDP may verify the country as below Table 1 S. No. Countries Source for verification from website of (a) List of countries where the securities market regulator is a signatory to IOSCO MMOU Interna....
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....gistration subject to fulfilment of applicable eligibility requirements. 1.4.2.5 DDP shall mention name of its signatory(ies) in the FVCI registration approval while communicating registration approval to the FVCI. 1.4.2.6 DDP shall verify that identification of Beneficial owners is in accordance with Rule 9 (3) of PML Rules. 1[ 1.4.3. A SWAGAT-FI FVCI applicant may apply for registration as FVCI together with application for registration as FPI, without filling application form or supporting documents. Such application shall be processed on the basis of information and documents submitted by the applicant for its application for registration as FPI. Provided the applicant appoints the same custodian and DDP for FVCI registration as appointed for FPI registration.] 2[1.4.4 FVCI meeting the requirements for SWAGAT-FI FPI may convert to SWAGAT-FI FVCI on making an application to its DDP. Provided the FVCI appoints the same custodian and DDP for FVCI registration as appointed for FPI registration.] 1.5 Continuance/renewal of Registration 3[1.5.1 An existing FVCI registered on or before December 31, 2019 shall (i) pay the renewal fee to its DDP and (ii) intimate changes i....
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....efore assessing the application afresh on its own merits. If the application has been rejected for any other reason, then the DDP shall assess the application on its own merit as per FVCI Regulations. 1.7.2 DDPs shall maintain a database of FVCI applicants. DDP shall input the details of FVCI applicants in the database. Where an FVCI application is rejected by a DDP, the DDP shall mention the reason for such rejection in the database. 1.8 Reporting 1.8.1 Every DDP shall submit to SEBI, monthly reports on applications received from FVCI applicants as per the format specified in Annexure- 1A and such other reports as may be required by SEBI. The report pertaining to a month may be submitted by DDPs to SEBI through email at [email protected]. latest by 10th of the following month. 1.8.2 The DDP shall submit to SEBI monthly reports of the fees collected for all the FVCI registered by it as per the format set out in Annexure- 1B hereto through email at [email protected]. and such other reports as may be required by SEBI. 1.9 Name change 1.9.1 In case the FVCI has undergone a change in name, the request for updation/ incorporation of a new name should be submitted by....
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....(s) shall be considered only if such Global Custodian has been explicitly authorized to take such steps by the FVCI. 1.11.2 Upon receipt of no objection from the transferor DDP, the transferee DDP shall approve the change. In case, the request for change in DDP is received from Global Custodian, the transferee DDP shall inform Compliance Officer of the FVCI regarding the change in its DDP. 1.11.3 Once the change of DDP is approved by the DDP, the FVCI shall transfer accounts and assets, as the case may be, to the new DDP within a period of 30 days. In case the transition does not take place within the stipulated time, the FVCI shall provide reasons for the same and seek extension from DDP for a further period of 30 days. Once the transition is complete, transferee DDP shall intimate SEBI about the change. The new and old DDPs, shall provide joint confirmation on completion of transition of data and documents to SEBI. 1.11.4 With respect to the process of change of DDP by an FVCI, the new DDP (i.e. transferee) may rely on the due diligence carried out by the old DDP. However, the new DDP is required to carry out adequate due diligence at the time when the FVCI applies for continu....
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....CI and re-assess the eligibility of the FVCI including requiring FVCI to seek fresh registration. However, the DDP shall mandatorily require the FVCI to seek fresh registration in case of 'Type I' material changes listed at sr. no. I to V of clause 1.12.1.2 above. 1.12.3 Where there is a delay in intimation of material change by the FVCI to the DDP, the DDP shall, as soon as possible but not later than two working days, inform all such cases to SEBI for appropriate action, if any, along with reason for delay. 1.13 Change in Status of a Compliant Jurisdiction 1.13.1 If a jurisdiction that was compliant at the time of grant of registration as a FVCI, becomes non-compliant subsequently, i.e. (a) ceases to be a member of IOSCO/ Bilateral Memorandum of Understanding with SEBI/ BIS or (b) becomes listed in FATF public statement as a "high risk" and "non-cooperative" jurisdiction, then the Custodian shall not allow such FVCIs to make fresh purchases until the jurisdiction/FVCI is compliant with the Regulations. The DDP shall inform to SEBI, details of such FVCIs upon such change. 1.13.2 However, the FVCI shall be permitted to sell the investments or continue to hold the investments a....
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....n/ local Custodian is accepted in lieu of Board Resolution. Board Resolution and the authorized signatory list is not required if SWIFT is used as a medium of instruction. 3 UBO is not required for Government and Government related entities. Notes to the Table: i. FVCI shall provide an undertaking that upon demand by Regulators/ Law Enforcement Agencies, the exempted / relevant document/s would be submitted to the intermediary. ii. For non-PAN related KYC documents (including KYC form), a local custodian can rely on KYC carried out by another entity of the same financial group (like a Global Custodian or Investment Manager) which is regulated and coming from an FATF member country, where KYC is carried out as per their home jurisdiction standards. Where this reliance is placed, such entity/ FVCI shall provide an undertaking to the effect that the relevant KYC documents, would be submitted to the DDP/ local intermediary when required by regulator/law enforcement agency/ government departments/ tax authority, etc. However, the Custodian / local intermediary will be required to collect constitution documents and Beneficial Owner (BO) related declarations (wherever applicable)....
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....natural persons as group, with their name & address BO Group's percentage Shareholding / Capital / Profit ownership in the FVCI Tax Residency Number/ Social Security Number/ Passport Number of BO/ any other Government issued identity document number (example driving license) (Please provide any) i. Beneficial owners of FVCIs having General Partner/Limited Partnership structure shall be identified on ownership or entitlement basis and control basis. ii. The materiality threshold to identify the beneficial owner shall be first applied at the level of FVCI and next look through basis shall be applied to identify the beneficial owner of the intermediate shareholder/ owner entity. Beneficial owner and intermediate shareholder/ owner entity with holdings equal & above the materiality thresholds in the FVCIs shall be identified on a look through basis. For intermediate material shareholder/ owner entity/ies, name, country and percentage holding shall also be disclosed as per Annexure-1C. iii. The term senior managing official (SMO), for identification as....
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....o' means download without consent c. Where Download Consent Flag is "Yes", an email with the consent link with decision tab "Approve" or "Reject", will be sent to the authorised representative of FVCI (as per the details updated in "a" above), requesting their consent to provide the KYC records to the requesting intermediary. d. KRA will send an email to the requesting intermediary that consent request email has been sent to the authorised representative of the FVCI, to enable them to follow up for the consent. e. KRA will permit download of KYC records and information once the consent is received from the authorised representative of the FVCI. f. Whenever KYC details of client are modified by intermediaries, KRA system sends unsolicited download of KYC information to all intermediaries who have either uploaded/downloaded/modified KYC information of the FVCI. The unsolicited KYC download including UBO details of the FVCI will be available to the intermediaries who have uploaded/downloaded/modified, such FVCIs KYC details in the past, even when the Download Consent Flag is set as "Yes" or otherwise. g. In case the FVCI closes the account with an intermediary, the FVCI or t....
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..... 2.10 List of supporting documents: Proof of Address: - List of documents admissible as Proof of Address: (Documents having an expiry date should be valid on the date of submission.) i. Document specifying the address issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Tax Authorities such as Passport, Driving license, etc. Intermediaries may place reliance on address appearing on website of regulator/ registrar for address proof ii. Utility bills like Telephone Bill, Electricity bill or Gas bill - Not more than 2 months old. iii. Bank Account Statement/Passbook/letter -- Not more than 3 months old. iv. Power of Attorney given by FVCI to Custodians specifying the address (duly notarized and/or apostilled or consularised). v. Intermediary may rely on constitutive documents to establish Proof of residency for multilateral organisations. Annexure -1A Monthly Applications Report The report pertaining to a month to be submitted by DDPs to SEBI by 10th of the following month in the format specified under: Summary of the applications received and disposed during the month Name of the DDP Application t....
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....erial shareholder/ owner) - therefore XYZ needs to be identified and the identification of underlying individuals / non-individuals having controlling ownership interest in the FVCI or control of XYZ should be identified * XYZ is further controlled by PQR fund (trust)- Hence, PQR fund also needs to be identified on a look through basis. * Mr. ST is holding 35% in PQR fund - So, Mr. ST needs to be identified as BO. Information of Intermediate material shareholder/ owner- on Ownership basis Name Direct / Indirect Stake Names of the entity(ies) through which the stake in the FVCI is held indirectly Percentage stake held in the applicant Country/Nationality Individual /Non-Individual XYZ Ltd. Direct 75 Non-Individual Information of Intermediate material shareholder/ owner- on control basis Name Method of Control (Give Details including names of the intermediate structures, if any, through which control is exercised ) Percentage control on the applicant, if applicable Country/Nationality Individual/Non-Individual PQR fund Management Share in XYZ Ltd. Non-Individual Mr. ST Holds 35% shares....