TMI BlogOperational Guidelines for Designated Depository ParticipantsX X X X Extracts X X X X X X X X Extracts X X X X ..... se of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. The circular is available on SEBI website at www.sebi.gov.in under the categories Legal framework and information for - FII . Yours faithfully, S. Madhusudhanan Deputy General Manager +91-22-26449614 smadhu@sebi.gov.in SEBI (Foreign Portfolio Investors) Regulations, 2014 Operational Guidelines for Designated Depository Participants These operational guidelines for Designated Depository Participants ( DDPs ) are issued to facilitate implementation of SEBI (Foreign Portfolio Investors) Regulations, 2014 ( the Regulations ). 1.0 Engagement of DDP Each FPI shall engage a DDP before making investment in Indian securities market. At all times the DDP and the Custodian of Securities ( Custodian ) of the FPI shall be the same entity. 2.0 Registration of FPI by DDP 2.1 Scrutiny of applications The application received for grant of registration as FPI in the format prescribed under the Regulations (Form A) sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) / (No) 6 Is it legally permissible for the applicant to invest in securities outside the country of its incorporation or establishment? (Yes) / (No) 7 Whether the applicant is authorized by its Articles of the Memorandum and/or Articles of Association or equivalent document(s) or the agreement to invest on its own behalf or on behalf of its clients? (Yes) / (No) 8 Whether the applicant has good track-record, professional competence, financial soundness, sufficient experience, good reputation of fairness and integrity, in general? (Yes) / (No) 9 Brief details of the activities carried out by the applicant. 10 Whether the applicant is fit and proper? (Yes) / (No) 11 PCC/MCV status of the applicant 12 Whether the applicant is a part of any investor group? (Yes) / (No) 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reclassified as category III. 2.5.6 If an existing broad based fund registered as Category II FPI, ceases to remain broad based on account of redemption etc., the procedure specified at clause 2.5.1 to clause 2.5.5 shall be followed. 3.0 Surrender Of Registration 3.1 Where an FPI desires to surrender its certificate of registration, it may make an application to the DDP. The DDP shall accept the surrender of registration after ensuring the following: 3.1.1 There are no dues by the applicant outstanding to SEBI. 3.1.2 The holdings of the concerned applicant in security account and bank account is nil. 3.1.3 SEBI has given its No Objection Certificate (NOC). 4.0 Clubbing Of Investment Limits 4.1 Where multiple FPIs belong to the same investor group, the investment limits of all such FPIs shall be clubbed at the investment limit as applicable to a single FPI. This shall be the responsibility of the depositories. 4.2 For the purpose of ascertaining investor group, the concerned DDPs shall consider all such entities having direct or indirect common shareholding/ beneficial ownership/ beneficial interest of more than 50%, as belonging to same investor gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.7 The depositories shall put in place appropriate systems, procedures and mechanisms to capture and maintain the details of FPIs belonging to the same investor group, based on the information provided by the DDPs, from time to time. 4.8 The depositories shall put in place appropriate systems, procedures and mechanisms to capture and maintain the details of holdings of FPIs belonging to the same investor group, based on the information provided by DDPs/Custodians from time to time. 4.9 The depositories shall put in place appropriate systems, procedures and mechanisms to monitor the investment limit/ holdings of FPIs belonging to the same investor group. 4.10 The depositories shall ensure that the aggregate holdings of all FPIs belonging to the same investor group should remain below 10% of the paid up capital of the investee company. 4.11 In case the aggregate holdings of FPIs belonging to the same investor group exceeds the stipulated limit for any reason whatsoever, the depositories shall put in place appropriate procedures and mechanism to bring back the holdings within the stipulated investment limit, in a reasonable period of time not exceeding 7 days. 4.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quest shall mention the reason for seeking extension and also accompanied by a statement of current holdings in the required format. These requests may be considered based on the merits of the case. 5.3 Name Change 5.3.1 In case the FPI has undergone a change in name, the request for updation/ incorporation of new name should be submitted by the FPI to the DDP accompanied by documents certifying the name change. The documents relevant for name change are: i. Original FPI registration certificate granted in the old name; ii. Certified copy of document(s) from home regulator evidencing the name change; iii. Certified copy of document(s) from of Registrar of Company (or equivalent authority) (wherever applicable) issued, thereby evidencing the name change. iv. An undertaking by the FPI stating that it is a mere name change and does not involve change in beneficial ownership. 5.3.2 Upon receipt of the request for name change along with abovementioned documents, the DDP shall effect the change in name in the Registration Certificate and in its database. 5.3.3 If there is a delay of more than six months in intimation of name change by the FPI to the DDP, then it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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