Regulation 23 - General obligations and responsibilities of foreign portfolio investors - Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014

CHAPTER V GENERAL OBLIGATIONS AND RESPONSIBILITIES OF FOREIGN PORTFOLIO INVESTORS General obligations and responsibilities of foreign portfolio investors. 23. (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) forthwith 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; (c) forthwith inform the Board and designated depository participant in writing, if there is any material change in the information 4 [ including any direct or indirect change in its structure or ownership or control, ] previously furnished by him to the Board or designated depository participant; (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) forthwith inform the Board and the designated depository participant, in case of any penalty, pending litigations 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; (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 and circulars issued from time to time and provide an express undertaking to this effect to the designated depository participant; 1 [(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;] 2 [(i)] provide such declarations and undertakings as required by the designated depository participant; and 3 [(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 prescribed thereunder, the Financial Action Task Force standards and circulars issued from time to time by the Board.] (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. 5 [ (3) Multiple entities having common ownership, directly or indirectly, of more than fifty percent. or common control shall be treated as being 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. (3A) Notwithstanding anything contained in sub-regulation (3), the clubbing of investment limit of foreign portfolio investors having common control shall not be applicable where: (i) the foreign portfolio investors are appropriately regulated public retail funds; or (ii) the foreign portfolio investors are public retail funds majority owned by appropriately regulated public retail fund on look through basis; or (iii) 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. ] 6 [ (4) In order to appropriately monitor investment concentration where common ownership or control is identified for such public retail funds, the Indian depositories shall maintain details of controlling entities on the basis of name, address, nationality, passport number/ any other identification card issued by Government and provide appropriate reports to the Board on a periodic basis. ] 7 [ (5) ] In case of any direct or indirect change in structure or 8 [ common ownership or control ] of the foreign portfolio investor, it shall bring the same to the notice of its designated depository participant forthwith. ************** NOTES:- 1 Inserted by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2018, w.e.f. 05-04-2018. 2 Clause (h) re-numbered as clause (i) by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2018, w.e.f. 05-04-2018. 3 Clause (i) re-numbered as clause (j) and substituted by the Securities and Exchange Board of India (Foreign Portfolio Investors) (Amendment) Regulations, 2018, w.e.f. 05-04-2018. Prior to substitution, clause (i) read as under: (i) provide any additional information or documents as may be required by the designated depository participant to ensure compliance with the Prevention of Money Laundering Act, 2002 and rules and regulations prescribed thereunder, Financial Action Task Force standards and circulars issued from time to time by the Board. 4. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2018 /58 dated 31-12-2018 5. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2018 /58 dated 31-12-2018 before it was read as, (3) In case the same set of ultimate beneficial owner(s) invest through multiple entities, such entities shall be treated as part of 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. 6. Inserted vide Notification No. SEBI/LAD-NRO/GN/ 2018 /58 dated 31-12-2018 7. Re-Numbered vide Notification No. SEBI/LAD-NRO/GN/ 2018 /58 dated 31-12-2018 before it was read as, (4) 8. Substituted vide Notification No. SEBI/LAD-NRO/GN/ 2018 /58 dated 31-12-2018 before it was read as, beneficial ownership