Mumbai: With an aim to attract a larger number of foreign investors to Indian capital markets, Sebi on Tuesday approved wide-ranging changes in the way they operate and made their registration and compliance requirements much simpler and easier.
The Sebi board also approved merging different classes of investors such as FIIs, their Sub Accounts and Qualified Foreign Investors (QFIs) into a new category, Foreign Portfolio Investors (FPIs), to put in place a simplified and uniform set of entry norms for them.
The decisions were taken after a discussion on a report of the 'Committee on Rationalization of Investment Routes and Monitoring of Foreign Portfolio Investments' under the Chairmanship of former Cabinet Secretary K M Chandrasekhar.
"While accepting the recommendations of the committee, the Board decided that the recommendations concerning Sebi would be implemented by Sebi and it would refer the other recommendations to Government of India for implementation," the regulator said in a statement after the board meeting on Tuesday.
Among the measures approved on Tuesday, any portfolio investments would be defined as investment by any single investor or investor group, which shall not exceed 10 per cent of the equity of an Indian company.
"Any investment beyond the threshold of 10 percent shall be considered as Foreign Direct Investment (FDI)," Sebi said.
These measures come at a time when the rupee has weakened considerably against the dollar and recently hit its all-time low levels of nearly 60 to a dollar. Also, FIIs have been pulling out money from the Indian debt market, which has resulted in the hardening of yields on government bonds.
In order to make the entry norms easier, Sebi has also approved doing away with the current practice of FIIs and their sub-accounts requiring a prior direct registration of the regulator to operate in Indian markets.


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