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TMI BlogFramework for providing flexibility to Foreign Portfolio Investors in dealing with their securities post expiry of their registrationX X X X Extracts X X X X X X X X Extracts X X X X ..... r Custodians No. SEBI/HO/AFD/AFD PoD-2/P/CIR/2024/40 dated May 10, 2024 (hereinafter referred to as the Custodian Master Circular ) has, inter alia, specified the reporting requirements for Custodians under Chapter IV of the Custodian Master Circular. 2. SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2024 were notified on June 03, 2024 , amending the SEBI (Foreign Portfolio Investors) Regulations, 2019 , inter alia, for providing flexibility to Foreign Portfolio Investors (FPIs) in dealing with their securities post expiry of their registration. 3. In view of the amendments to the SEBI (FPI) Regulations, 2019 referred to at Para 2 above, the FPI Master Circular stands modified as follows: 3.1. Para 4 of Part A of the FPI Master Circular stands modified as under: 4. Continuance of Registration i. FPIs who wish to continue with their registration for the subsequent block of three years, should pay the fees to their DDPs and inform change in information, if any, as submitted earlier. ii. In case of no change in information, FPIs shall give declaration that there is no change in the information, as previously furnished. iii. FPI shall provide the additional information, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular category/sub-category fails to comply with applicable eligibility requirements, it shall notify this change to its DDP to be reclassified under appropriate category/sub-category in accordance with Para 14(i) below. FPI may be required to provide to the DDP with additional KYC documents, as applicable. The concerned DDP / Custodian shall not allow such FPI to make fresh purchases till additional KYC requirements (if any) are complied with. However, such FPI shall be allowed to continue to sell the securities already purchased by it until expiry of its existing registration block or 180 days from the date of notification of change by the FPI, whichever is later. 3.3. Para 15 of Part A of the FPI Master Circular stands modified as under: 15. Change in Status of a Compliant Jurisdiction If a jurisdiction, which was a compliant jurisdiction at the time of grant of registration to FPI, becomes non-compliant i.e. a) ceases to be a member of IOSCO/ Bilateral Memorandum of Understanding with SEBI/ BIS or b) becomes listed in FATF public statement as a high risk and non-cooperative jurisdiction, then the Custodian shall not allow such FPIs to make fresh purchases until the jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restrictions on accrual of corporate benefits and exercise of voting rights with respect to such securities held by the FPI. iii. In case the FPI continues to hold securities pursuant to expiry of the aforementioned time-period, the FPI shall be allowed to dispose the same within an additional time-period of 180 days, in the following manner subject to the following conditions: a. Disposal of securities shall be subject to a financial disincentive of 5% of the sale proceeds, which shall be deducted by the custodian of the FPI from the sale proceeds. The custodian shall remit the amounts deducted as financial disincentive to the Investor Protection and Education Fund created by SEBI (hereinafter referred to as IPEF ), not later than 30 days from the date of deduction of the same. b. The opportunity to sell the securities shall be subject to the FPI fulfilling the prescribed KYC, AML/CFT requirements. c. During this period, sale of suspended, unlisted/delisted securities shall also be permitted through off-market transactions, in accordance with the pricing guidelines for such sale as per FEMA Rules, as specified in Para 3 of Part C below. d. During this period the monetary/non-monet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of such securities being written-off/deemed to have been written-off by FPIs. Monetary corporate benefits if received by the custodians post write-off / deemed write-off shall be credited to IPEF not later than 30 days from the date of receipt of the same. ii. Securities listed exclusively on one Stock Exchange (NSE or BSE) shall be transferred to the escrow account operated by empanelled broker of the respective stock exchange for this purpose. Balance securities shall be transferred to the escrow account operated by empanelled broker of NSE for this purpose. iii. After transfer of securities to the escrow account, the empanelled broker shall attempt to sell the securities at the available market price. iv. The disposal of listed equity securities shall be carried out through the regular online trading platform of the Stock Exchanges, excluding block deal window. v. The proceeds from the sale, net of brokerage and statutory charges, shall be transferred to the IPEF. vi. The disposal of written-off securities shall be done in terms of the operational mechanism adopted by the Stock Exchanges and shall be monitored by the Stock Exchanges. Stock Exchanges shall also monitor the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Holdings as on start of the financial disincentive period (quantity) Holdings as on the start of the month (quantity)* Quantity sold during the disincentive period of the month Sale proceeds during the disincentive period of the month (INR) Holdings as on the close of the current month (quantity)# Holdings as on close of the financial disincentive period (quantity) Financial disincentive deducted from sale proceeds during the month (INR) Report of financial disincentive and securities written-off/deemed to be written-off by FPIs for the month of ______________ Cumulative Financial disincentive deducted from sale proceeds (INR) Financial disincentive remitted to IPEF during the month (INR) Cumulative Financial disincentive remitted to IPEF (INR) Quantity of written-off / deemed written-off securities transferred to exchange emapanelled broker during the month Name of Exchange Date of transfer of securities to excahnge empanelled broker Cumulative Quantity of written-off / deemed written-off securities transferred to exchange emapnelled broker * For 1st month of securities entering into financial disincentive period, quantity of securities in Column J shall be same as in Column I # ..... 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