Regulation 31 - Obligations and responsibilities of designated depository participants - Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019

CHAPTER VI GENERAL OBLIGATIONS AND RESPONSIBILITIES OF DESIGNATED DEPOSITORY PARTICIPANTS Obligations and responsibilities of designated depository participants. 31. (1) All designated depository participants who have been granted approval by the Board 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) 1 [ as soon as possible but not later than two working days ] inform the Board in writing, if any information or particulars previously submitted to the Board are found to be false or misleading, in any material respect; (c) 1 [ as soon as possible but not later than two working days ] inform the Board in writing, if there is any material change in the information previously furnished by him to the Board; (d) furnish such information, record or documents to the Board and Reserve Bank of India, as may be required, in relation to its activities as a designated depository participant; (e) ensure that only registered foreign portfolio investors are allowed to invest in securities market; (f) have adequate systems to ensure that in case of jointly held depository accounts, each of the joint holders meet the requirements specified for foreign portfolio investors and shall perform KYC due diligence for each of the joint holders; (g) in case of any penalty, pending litigation or proceedings, findings of inspections or investigations for which action may have been taken or is in the process of being taken by any regulator against a designated depository participant, the designated depository participant shall bring such information 1 [ as soon as possible but not later than two working days ] , to the attention of the Board, depositories and stock exchanges; (h) be guided by the relevant circular on Anti-Money Laundering or Combating the Financing of Terrorism specified by the Board from time to time. (2) The designated depository participant engaged by an applicant seeking registration as foreign portfolio investor shall (a) ascertain at the time of granting registration and whenever applicable, whether the applicant forms part of any investor group; (b) open a dematerialized account for the applicant only after ensuring compliance with all the requirements under Prevention of Money Laundering Act, 2002 and rules and regulations specified thereunder, Financial Action Task Force standards and circulars issued by the Board in this regard, from time to time and shall also ensure that foreign portfolio investors comply with all these requirements on an ongoing basis; (c) carry out necessary due diligence to ensure that no other depository account per depository is held by any of the concerned applicant as a foreign portfolio investor, before opening a depository account Provided that a foreign portfolio investor can open separate depository accounts for holding securities under the Voluntary Retention Route or any other scheme as specified by the Reserve Bank of India or the Board; (d) collect and remit fees to the Board, in the manner as specified in Part A of Second Schedule ; and (e) in case of change in structure or constitution or direct or indirect change in common ownership or control reported by the foreign portfolio investor, re-assess the eligibility of such foreign portfolio investor. (3) The designated depository participant shall maintain segregation of activities such that there is no conflict of interest between the activity of grant of registration to a foreign portfolio investor in the capacity of a designated depository participant and its other activities. (4) The designated depository participant shall submit the reports as specified by the Board from time to time. (5) The designated depository participant shall carry out an annual review of its systems, procedures and controls by an independent professional. Explanation : The review shall cover the systems and procedures being followed by them to meet its obligations towards its clients, regulators and other relevant bodies and compliance with the requirements of the regulations and circulars issued by the Board. (6) The designated depository participant shall furnish to the Board annual audit reports on its internal control for a particular calendar year within ninety days of the next calendar year. (7) The designated depository participant shall submit the Action Taken Report, if any, on the audit report on a quarterly basis to the Board. ***************** NOTES:- 1. Substituted vide Notification No. SEBI/LAD-NRO/GN/2023/128., dated 14.03.2023 , before it was read as, forthwith