Regulation 4 - Eligibility criteria of foreign portfolio investor - Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019

Eligibility criteria of foreign portfolio investor. 4 . A designated depository participant shall consider an application for grant of certificate of registration as a foreign portfolio investor if the applicant satisfies the following conditions namely: - (a) the applicant is not a resident Indian; (b) the applicant is not a non-resident Indian or an overseas citizen of India; 1 [ (c) non-resident Indians or overseas citizens of India or resident Indian individuals may be constituents of the applicant 5 [ subject to the following conditions: i. the contribution of a single non-resident Indian or overseas citizen of India or resident Indian individual shall be below twenty-five percent of the total contribution in the corpus of the applicant; ii. the aggregate contribution of non-resident Indians, overseas citizens of India and resident Indian individuals in the corpus of the applicant shall be below fifty percent of the total contribution in the corpus of the applicant; iii. the contribution of resident Indian individuals shall be made through the Liberalised Remittance Scheme notified by the Reserve Bank of India and shall be in global funds whose Indian exposure is less than fifty percent; iv. the non-resident Indians, overseas citizens of India and resident Indian individuals shall not be in control of the applicant; and v. any other conditions as may be specified by the Board from time to time. ] Provided that resident Indian other than individuals, may also be constituents of the applicant, subject to the following conditions, namely i. such resident Indian, other than individuals, is an eligible fund manager of the applicant, as provided under sub-section (4) of section 9A of the Income Tax Act, 1961 (43 of 1961) ; and ii. the applicant is an eligible investment fund as provided under sub-section (3) of section 9A of the Income Tax Act, 1961 (43 of 1961) which has been granted approval under the Income Tax Rules, 1962 2 [ : ]] 3 [ Provided further that resident Indian, other than individuals, may also be constituents of the applicant, subject to the following conditions, namely i. the applicant is an Alternative Investment Fund setup in the International Financial Services Centres and regulated by the International Financial Services Centres Authority; ii. such resident Indian, other than individuals, is a Sponsor or Manager of the applicant; and iii. the contribution of such resident Indian, other than individuals, shall be up to- a. 2.5% of the corpus of the applicant or US $ 7,50,000 (whichever is lower), in case the applicant is a Category I or Category II Alternative Investment Fund; or b. 5% of the corpus of the applicant or US $ 1.5 million (whichever is lower), in case the applicant is a Category III Alternative Investment Fund; ] 6 [ Provided further that the provisions of sub-clause (ii) of clause (c) shall not be applicable to an applicant, regulated by the International Financial Services Centres Authority and based in the International Financial Services Centres in India and subject to conditions as may be specified by the Board: Provided further that the existing exemptions specified by the Board in relation to the conditions under sub-clauses (i) to (iv) of clause (c) of this regulation as on the date of notification of the Securities and Exchange Board of India (Foreign Portfolio Investors) (Second Amendment) Regulations, 2024 shall continue to remain in force. ] (d) the applicant is a resident of the country whose securities market regulator is a signatory to the International Organization of Securities Commission s Multilateral Memorandum of Understanding (Appendix A Signatories) or a signatory to the bilateral Memorandum of Understanding with the Board: Provided that an applicant being Government or Government related investor shall be considered as eligible for registration, if such applicant is a resident in the country as may be approved by the Government of India; (e) the applicant being a bank is a resident of a country whose central bank is a member of Bank for International Settlements: Provided that a central bank applicant need not be a member of Bank for International Settlements; (f) the applicant or its underlying investors contributing 4 [ more than the threshold prescribed under sub-rule (3) of rule 9 of the Prevention of Money-laundering (Maintenance of Records) Rules, 2005 ] in the corpus of the applicant or identified on the basis of control, shall not be the person(s) mentioned in the Sanctions List notified from time to time by the United Nations Security Council and is not a resident in the country identified in the public statement of Financial Action Task Force as (i) a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply; or (ii) a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies; (g) the applicant is a fit and proper person based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008; (h) any other criteria specified by the Board from time to time: Provided that clause (a), (d) and (e) shall not apply to an applicant incorporated or established in an International Financial Services Centre. ************* NOTES:- 1. Substituted vide Notification No. SEBI.LAD-NRO/GN/2021/32 dated 03-08-2021 before it was read as (c) non-resident Indians or overseas citizens of India or resident Indian individuals can be constituents of the applicant provided they meet conditions specified by the Board from time to time; 2. Substituted vide Notification No. SEBI/LAD-NRO/GN/2021/54 dated 26-10-2021 before it was read as ; 3. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/54 dated 26-10-2021 4. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/143 dated 10-08-2023 before it was read as, twenty-five per cent or more 5. Substituted vide Notification No. SEBI/LAD-NRO/GN/2024/185 dated 26-06-2024 before it was read as, provided they meet the conditions specified by the Board from time to time: 6. Inserted vide Notification No. SEBI/LAD-NRO/GN/2024/185 dated 26-06-2024