Regulation 6 - Consideration of application. - Securities And Exchange Board of India (Foreign Institutional Investors) Regulations, 1995

Consideration of application. 6. 1 [(1)] For the purpose of the grant of certificate the Board shall take into account all matters which are relevant to the grant of a certificate and in particular the following, namely:- (a) the applicant's track record, professional competence, financial soundness, experience, general reputation of fairness and integrity: 2 [Provided that in case of a newly established fund, the track record of the investment manager of the fund who has promoted it may be taken into consideration: Provided further that such investment manager shall furnish the details in respect of disciplinary action, if any, taken against it.] (b) whether the applicant is regulated by an appropriate foreign regulatory authority: 3 [Provided that university funds, endowments, foundations, charitable trusts and charitable societies may be considered for registration even though they are not regulated by a foreign regulatory authority;] (c) whether the applicant has been granted permission under the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) by the Reserve Bank of India for making investments in India as a Foreign Institutional Investor; (d) whether the applicant is 4 [(i) an institution established or incorporated outside India as a pension fund, mutual fund, investment trust, insurance company or reinsurance company;] 5 [(ia) an International or Multilateral Organisation or an agency thereof or a Foreign Governmental Agency, 6 [Sovereign Wealth Fund] or a Foreign Central Bank;] 7 [(ii) an asset management company, investment manager or advisor 8 [***], bank or institutional portfolio manager, established or incorporated outside India and proposing to make investments in India on behalf of broad based funds and its proprietary funds, if any;] 9 [(iii) a trustee of a trust established outside India and proposing to make investments in India on behalf of broad based funds and its proprietary funds, if any;] 10 [(iv) university fund, endowments, foundations or charitable trusts or charitable societies. Provided that while considering the application from applicants under clause (iv) the Board may take into account the following, namely:- (a) whether the applicant has been in existence for a period of at least 5 years; (b) whether it is legally permissible for the applicant to invest in securities outside the country of its incorporation or establishment; (c) whether the applicant has been registered with any statutory authority in the country of their incorporation or establishment; (d) whether any legal proceeding has been initiated by any statutory authority against the applicant.] 11 [(e) whether the applicant has been serving public interest]. Explanation: For the purposes of this regulation, broad based fund means a fund, established or incorporated outside India, which has at least 12 [twenty] investors, with no single individual investor holding more than 13 [forty-nine per cent] of the shares or units of the fund: Provided that if the broad based fund has institutional investor(s), it shall not be necessary for the fund to have 14 [twenty] investors: Provided further that if the broad based fund has an institutional investor who holds more than 15 [forty nine per cent] of the shares or units in the fund, then the institutional investor must itself be a broad based fund; 16 [***] (e) Whether the grant of certificate to the applicant is in the interest of the development of the securities market; 17 [(f) Whether the applicant is a fit and proper person.] 18 [(2) Omitted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2007, w.e.f. 8-1-2007.] -------------------- Notes: 1 . Inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulation, 2000, w.e.f.29-2- 2000. 2. Inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f.22-5-2008. 3. Inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f.22-5-2008. 4. Substituted by the SEBI (Foreign Institutional Investors) (Second Amendment) Regulations, 2006, w.e.f. 21-8-2006. Prior to its substitution, sub-clause (i), read as under:- i) an institution established or incorporated outside India as Pension Fund or Mutual Fund or Investment Trust; or 5. Inserted by the SEBI (Foreign Institutional Investors) (Second Amendment) Regulations, 2006, w.e.f. 21-8-2006. 6. Inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f 22-5-2008. 7. Substituted by the SEBI (Foreign Institutional Investors) (Second Amendment) Regulations, 2006, w.e.f. 21-8-2006. Prior to its substitution, sub-clause (ii) as amended by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 1997, w.e.f. 12-2-1997, read as under:- an Asset Management Company or Nominee Company, or Bank or Institutional Portfolio Manager, established or incorporated outside India and proposing to make investments in India on behalf of broad based funds and its proprietary funds, if any; or 8. Words nominee company omitted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f. 22-5-2008. 9. Substituted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f. 22-5-2008. Prior to the substitution sub-clause (iii) inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 1997 w.e.f. 12.2.1997 read as under: a trustee or a Power of Attorney holder incorporated or established outside India, and proposing to make investments in India on behalf of broad funds and its proprietary funds, if any . 10. Inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 1996 w.e.f. 9.10.1996. 11. Inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f.22-5-2008. 12. Substituted for fifty by the SEBI (Foreign Institutional Investors) (Second Amendment) Regulations 1999 w.e.f. 26-8-1999. 13. Substituted for ten percent by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f.22-5-2008. 14. Substituted for fifty by the SEBI (Foreign Institutional Investors) (Second Amendment) Regulations 1999 w. e. f. 26-8-1999. 15. Substituted for ten percent by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e.f. 22-5-2008. 16. Word or omitted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2008, w.e. f. 22-5-2008. 17. Inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 1997 w.e.f. 5.12.1997. 18. Prior to its omission, sub-regulation (2), as inserted by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 2000, w.e.f. 29.2.2000 read as under: (2)(a) A domestic portfolio manager or domestic asset management company shall be eligible to be registered as a foreign institutional investor to manage the funds of sub-accounts; (b) The domestic portfolio manager or domestic asset management company shall make an application in terms of regulations 3, 4 and 5; (c) For the grant of certificate to the domestic asset management company or to a domestic portfolio manager the board shall consider the following: (i) whether the applicant is an approved asset management company or a registered portfolio manager and that the approval or registration is valid (ii) whether any disciplinary proceeding is pending before the Board against applicant.