Regulation 22 - General obligations and responsibilities of foreign portfolio investors - Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019

CHAPTER V GENERAL OBLIGATIONS AND RESPONSIBILITIES OF FOREIGN PORTFOLIO INVESTORS General obligations and responsibilities of foreign portfolio investors. 22. (1) The foreign portfolio investor shall (a) comply with the provisions of these regulations, as far as they may apply, circulars issued thereunder and any other terms and conditions specified by the Board from time to time; (b) 6 [ **** ] inform the Board and designated depository participant in writing, if any information or particulars previously submitted to the Board or designated depository participant are found to be false or misleading, in any material respect 7 [ , in the manner and within the timelines as may be specified by the Board from time to time ] ; 2 [ (c) 8 [ **** ] inform the Board and designated depository participant in writing, if there is any material change in the information including any direct or indirect change in its structure or ownership or control or investor group previously furnished by him to the Board or designated depository participant 9 [ , in the manner and within the timelines as may be specified by the Board from time to time ] ; ] (d) as and when required by the Board or any other Government agency in India, submit any information, record or documents in relation to its activities as a foreign portfolio investor; (e) 10 [ **** ] inform the Board and the designated depository participant, in case of any penalty, pending litigation or proceedings, findings of inspections or investigations for which action may have been taken or is in the process of being taken by an overseas regulator against it 11 [ , in the manner and within the timelines as may be specified by the Board from time to time ] ; (f) obtain a Permanent Account Number from the Income Tax Department; (g) in relation to its activities as foreign portfolio investor, at all times, subject itself to the extant Indian laws, rules, regulations, guidelines and circulars issued from time to time; (h) be a fit and proper person based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008; (i) undertake necessary KYC on its shareholders/investors in accordance with the rules applicable to it in the jurisdiction where it is organised; (j) provide any additional information or documents including beneficiary ownership details of their clients as may be required by the designated depository participant or the Board or any other enforcement agency to ensure compliance with the Prevention of Money Laundering Act, 2002 and the rules and regulations specified thereunder, the Financial Action Task Force standards and circulars issued from time to time by the Board; and (k) ensure that securities held by foreign portfolio investors are free from all encumbrances. Explanation An encumbrance created to meet any statutory and regulatory requirements shall not be considered under this clause. 3 [ (l) ensure that accurate details regarding its investor group are maintained with its designated depository participant at all times. ] (2) In case of jointly held depository accounts, each of the joint holders shall meet the requirements specified for foreign portfolio investor and each shall be deemed to be holding a depository account as a foreign portfolio investor. (3) Multiple entities registered as foreign portfolio investors and directly or indirectly, having common ownership of more than fifty per cent or common control, shall be treated as part of the same investor group and the investment limits of all such entities shall be clubbed at the investment limit as applicable to a single foreign portfolio investor: Provided that in case the limit is breached due to transaction(s) by foreign portfolio investors under these regulations, the excess holding shall be divested within five trading days from the date of settlement of the trades causing the breach. Provided further that in case the foreign portfolio investor fails to divest the excess holding, the entire investment in the company by such foreign portfolio investors including its investor group shall be considered as investment under the Foreign Direct Investment as per the procedure specified by the Board and the foreign portfolio investor and its investor group shall not make further portfolio investment in that company under these regulations. (4) Notwithstanding anything contained in sub-regulation (3), the clubbing of investment limit of foreign portfolio investors having common control shall not be applicable where (a) foreign portfolio investors are appropriately regulated public retail funds; or (b) the foreign portfolio investors are public retail funds where the majority is owned by appropriately regulated public retail fund on look through basis; or (c) foreign portfolio investors are public retail funds and investment managers of such foreign portfolio investors are appropriately regulated. Explanation - Public retail funds means - (i) mutual funds or unit trusts which are open for subscription to retail investors and which do not have specific investor type requirements like accredited investors; (ii) insurance companies where segregated portfolio with one to one correlation with a single investor is not maintained; and (iii) pension funds. 4 [ (5) In case of any direct or indirect change in structure or common ownership or control of the foreign portfolio investor or investor group, it shall 12 [ **** ] bring the same to the notice of its designated depository participant 13 [ , in the manner and within the timelines as may be specified by the Board from time to time ] . ] 5 [ (6) A foreign portfolio investor that fulfils the criteria specified by the Board from time to time, shall provide information or documents in relation to the persons with any ownership, economic interest or control, in the foreign portfolio investor. (7) The information or documents specified in sub-regulation (6) shall be provided in the manner as may be specified by the Board from time to time. ] **************** NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/128., dated 14.03.2023 , before it was read as, forthwith 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/128., dated 14.03.2023 , before it was read as, (c) forthwith inform the Board and designated depository participant in writing, if there is any material change in the information including any direct or indirect change in its structure or ownership or control, previously furnished by him to the Board or designated depository participant; 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/128., dated 14.03.2023 , 4. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/128., dated 14.03.2023 , before it was read as, (5) In case of any direct or indirect change in structure or common ownership or control of the foreign portfolio investor, it shall forthwith bring the same to the notice of its designated depository participant. 5. Inserted vide Notification No. SEBI/LAD-NRO/GN/2023/143 dated 10-08-2023 6. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024 before it was read as, 1 [ as soon as possible but not later than seven working days, ] 7. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024 8. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024 before it was read as, as soon as possible but not later than seven working days, 9. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024 10. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024 before it was read as, 1 [ as soon as possible but not later than seven working days, ] 11. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024 12. Omitted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024 before it was read as, , as soon as possible but not later than seven working days, 13. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/183 dated 31-05-2024