Securities and Exchange Board of India (Foreign Institutional Investors) (Third Amendment) Regulations, 1998 - S.O. No.545(E) - SEBI/LE/FII/2725/98 - SEBI

SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 30th June, 1998 S.O. 545(E).-- In exercise of the powers conferred by sub-section (1) of Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995. I. (i) These regulations may be called the Securities and Exchange Board of India (Foreign Institutional Investors) (Third Amendment) Regulations, 1998. (ii) They shall come into force on the date of their publication in the Official Gazette. II. In the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 (hereinafter referred to as the 'Regulations'). 1. In Regulation 12, sub-regulation (3), for the words, sub-para (b) of Para 5 of Form A occurring at the end, the words Para 1 of Annexure B to Form A of the First Schedule shall be substituted. 2. In Regulation 13,-- (a) in sub-regulation (1), the following clauses (e) and (f), shall be inserted after clause (d), namely :-- (e) The Foreign Institutional Investor through whom the application for registration is made, has submitted undertakings that the sub-account fulfils the criteria referred to in this sub-regulation in a manner specified in Para 2 of Annexure B to Form A of the First Schedule. (f) The sub-account has paid registration fees in accordance with the Second Schedule. . (b) for sub-regulation (2) the following sub-regulation (2) shall be substituted, namely :-- (2) The Board on receipt of the undertakings and the registration fees as referred to in sub-regulation (1), may grant registration to the sub-account. . 3. In Regulation 15,-- (a) in sub-regulation (1), after clause (c), a new clause (d) shall be added, namely:-- (d) derivatives traded on a recognised stock exchange. (b) in sub-regulation (2), in the first proviso, the word unlisted or shall be inserted after the word in debt securities which are and before the words listed . (c) in sub-regulation (3), (i) after clause (a), a proviso shall be added, namely :-- Provided that nothing contained in clause (a) shall apply in respect of transactions in derivatives traded on a recognised stock exchange. (ii) in clause (c), after the first proviso, the following proviso shall be added, namely:-- Provided further that nothing contained in clause (c) shall apply to sale of securities by a Foreign Institutional Investor in response to a letter of offer sent by an acquirer in accordance with the Securities and Exchange Board of India (Substantial Acquisitions of Shares and Takeovers) Regulations, 1997. 4. In the First Schedule,-- (a) in Form A, in Para 5, for sub-para (b), the following sub-para (b), shall be substituted, namely:-- (b) Please provide additional information and undertakings, in respect of each client for which sub-account registration is being sought, as specified in Annexure B to this Form. (b) after Annexure A, an Annexure B, shall be added, namely :-- Annexure B [See Regulations 12(3), 13(1)(e) and para 5(b) of Form A] Additional information and undertakings to be provided in respect of each client for which sab-account registration is sought, in terms of sub-regulation (1) of Regulation 13 of the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 : 1. Sub-account to provide the following details : (i) Name of the client/sub-account, (ii) Date and place of incorporation or establishment of the client/sub-account. (iii) Constitution of the client/sub-account (i.e., Partnership Firm, Private Company, Public Company, Pension Fund, Mutual Fund, Investment Trust, etc.). (iv) Name of domestic custodian and designated bank to be used by the client/sub-account. Authorised signatory of sub-account/ client : (Name of sub-account) (Signature) Forwarded by FII (Name or FII) (Signature) 2. Please provide the following undertakings by the FII in respect of the client/sub-account: A. We hereby undertake that the ..................................(give name of client/sub-account) is (i) an institution or fund or portfolio established or incorporated outside India and proposes to make investment in India; (ii) a broad based fund in terms of regulation--[or proprietary fund of the Foreign institutional Investor mentioned in (i) above] (mention whichever is applicable); (iii) the Foreign Institutional Investor (give name and SEBI registration number) through whom the application for registration is made to the Board holds a certificate of registration as Foreign Institutional Investor, and (iv) the Foreign Institutional Investor through whom an application for registration of sub-account is made, is authorised to invest on behalf of the sub-account. . B. We also undertake in respect of our client/sub-account, ..................................(give name of the client/sub-account) that: (a) the client/sub-account or its directors have not been convicted by a Court for any offence involving moral turpitude or fraud and sentenced in respect thereof to imprisonment for a period greater than six months; (b) no winding up orders has been passed against the client/sub-account; (c) no order suspending or debarring the client/sub-account from permanently carrying on activities in the financial sector has been passed by any regulatory authority; (d) no order withdrawing or refusing to grant any license/approval to the client/sub-account which has a bearing on the securities market has been passed by any authority in the preceding five years; (e) any penalty imposed (including monetary penalty) by any regulatory authority has been carried out. C. In case the client/sub-account is a broadbased fund, please provide the following further undertaking: We undertake that the proprietary funds of .......................(give name of the Foreign Institutional Investor) shall not be invested through the client/sub-account. OR In case the client sub-account is a proprietary fund of the Foreign Institutional Investor, please provide the following further undertaking: We undertake that only the proprietary funds of the ...............................................(give name of the Foreign Institutional Investor) shall be invested through the client/sub-account. . We hereby agree and declare that the information provided and the undertakings given above are complete and true. And we further agree that we will immediately notify the Securities and Exchange Board of India and the Reserve Bank of India of any change in the information provided. Authorised Signatory of FII: (Name of FII) (Signature) 5. In the Second Schedule,-- (a) after para (2) and before para (3), a new para (2-A) shall be inserted, namely :-- ' (2-A). An application for registration of sub-account under Regulation 12 shall be accompanied by a registration fee of US $ 1000 which shall be payable at the time of initial application for registration as well as at the time of each renewal, and fees paid in respect of renewal shall be paid within 15 days of intimation by the Board.' (b) in Para 3, for the words 'The fee occurring in the beginning, the words The registration fees shall be substituted. [F. No. SEBI/LE/FII/2725/98] D.R. MEHTA, Chairman Footnote:- 1. SEBI (Foreign Institutional Investors) Regulations, 1995 the principal regulation, was published in the Gazette of India on November 14,1995, vide No. SEBI/LE/918(E). 2. SEBI (Foreign Institutional Investors) Regulations, 1995 was amended by the SEBI (Forcing Institutional Investors) Amendment Regulations, 1996 which was published in the Gazette of India on October 9, 1996 vide S.O. No. 702(E). 3. SEBI (Foreign Institutional Investors) Regulations, 1995 was amended by the SEBI (foreign Institutional Investors) (Second Amendment) Regulations, 1996 which was published in the Gazette of India on November 19,1996, vide S.O. No. 799(E). 4. SEBI (Foreign Institutional Investors) Regulations, 1995 was amended by the SEBI (Foreign Institutional Investors) Amendment Regulations, 1997 which was published in the Gazette of India on February 12, 1997, vide S.O. No. 105(E). 5. SEBI (Foreign Institutional Investors) Regulations, 1995 was further amended by the SEBI (Foreign Institutional Investors) Amendment Regulations, 1997 which was published in the Gazette of India on July 10, 1997, vide S.O, No. 495(E). 6. SEBI (Foreign Institutional Investors) Regulations, 1995 was further amended by the SEBI (Foreign Institutional Investors) (Third Amendment) Regulations, 1997 which was published in the Gazette of India on December 5, 1997. 7. SEBI (Foreign Institutional Investors) Regulations, 1995 was further amended by the SEBI (Foreign Institutional Investors) (Amendment) Regulations, 1998 which was published in the Gazette of India on April 20, 1998 vide S.O. No. 333 (E). 8. SEBI (Foreign Institutional Investors) Regulations, 1995 was further amended by the SEBI (Foreign Institutional Investors) (Second Amendment) Regulations, 1997 which was published in the Gazette of India on May 18, 1998 vide S.O. No. 417 (E).