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TMI BlogOperational Guidelines for Foreign Venture Capital Investors (FVCIs) and Designated Depository Participants (DDPs)X X X X Extracts X X X X X X X X Extracts X X X X ..... e form of operational guidelines ( Annexure-1 ). 3. The provisions of this circular shall come into force with effect from January 01, 2025. 4. This Circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with Regulations 3 , 8 , 9 , 10 , and 15 of FVCI Regulations to protect the interest of investors in securities and to promote the development of, and to regulate the securities market. 5. This Circular is available at www.sebi.gov.in under the link Legal ---Circulars . Yours faithfully, Manish Kumar Jha Deputy General Manager Tel No.: 022-26449219 E-mail: [email protected] Encl: Annexure-1 Annexure-1 Operational Guidelines for Foreign Venture Capital Investors These operational guidelines ( guidelines ) for Foreign Venture Capital Investors ( FVCIs ) and Designated Depository Participants ( DDPs ) are issued to facilitate smooth transition to the amended FVCI regime and operationalisation of the amended provisions of SEBI (Foreign Venture Capital Investors) Regulations, 2024 (FVCI Regulations ). Chapter 1 - Registration of Foreign Venture Capital Investors 1. Processing of FVCI application by DDPs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.1 Upon engagement by an FVCI, the DDP may seek transfer of registration related information of the FVCI from SEBI. 1.4 Processing of application for registration by DDPs 1.4.1 FVCI applicant shall submit duly filled application form ( Form-A ) supported by required documents and applicable fees. The application form in original should be duly signed. If an application form is incomplete, or lacks clarity, the applicant shall be advised by the DDP to clarify or furnish the desired information within a reasonable time. 1.4.2 DDPs shall consider the following checks for determination of eligibility at the time of processing FVCI application: 1.4.2.1 Country Check - The residency status of the FVCI applicant maybe ascertained from the place of incorporation/ establishment through an appropriate document or information such as any identification / registration document issued by applicable regulator or the Income Tax authority. For due diligence, DDP may verify the country as below Table 1 S. No. Countries Source for verification from website of (a) List of countries where the securities market regulator is a signatory to IOSCO MMOU International Organization of Securities Commissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .4.2.5 DDP shall mention name of its signatory(ies) in the FVCI registration approval while communicating registration approval to the FVCI. 1.4.2.6 DDP shall verify that identification of Beneficial owners is in accordance with Rule 9 (3) of PML Rules. 1.5 Continuance/renewal of Registration 1.5.1 An existing FVCI registered on or before December 31, 2019 shall (i) pay the renewal fee to its DDP and (ii) intimate changes in information, if any, as submitted earlier, on or before March 31, 2025. For subsequent blocks of five years starting from January 01, 2030, such FVCIs shall (i) pay the renewal fee to its DDP and (ii) intimate changes in information, if any, as submitted earlier, at least 15 days before the completion of the previous five-year block so as to continue with their registration. 1.5.2 An existing FVCI registered after December 31, 2019 shall (i) pay the renewal fee to its DDP and (ii) intimate changes in information, if any, as submitted earlier, at least 15 days before the completion of five years from the date of such registration so as to continue with their registration for the subsequent block of five years. 1.5.3 In terms of Regulation 9(4) of the FVCI Regula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees collected for all the FVCI registered by it as per the format set out in Annexure- 1B hereto through email at [email protected]. and such other reports as may be required by SEBI. 1.9 Name change 1.9.1 In case the FVCI has undergone a change in name, the request for updation/ incorporation of a new name should be submitted by the FVCI to the DDP accompanied by documents certifying the name change. Such name change can be evidenced by: Information available on the website of the home regulator; or Certified copy of document(s) from home regulator; or Certified copy of document(s) from Registrar of Company (or equivalent authority) (wherever applicable) issued; or Where above is not applicable, a Board Resolution or equivalent authorizing the name change 1.9.2 An undertaking by the FVCI shall be given stating that it is a mere name change and does not involve change in beneficial ownership or structure. 1.9.3 Upon receipt of the request for name change along with abovementioned documents, the DDP shall effect the change in name in the certificate. The DDP shall issue a letter and fresh registration certificate to such applicant acknowledging the change in name. 1.9.4 FVCI s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a and documents to SEBI. 1.11.4 With respect to the process of change of DDP by an FVCI, the new DDP (i.e. transferee) may rely on the due diligence carried out by the old DDP. However, the new DDP is required to carry out adequate due diligence at the time when the FVCI applies for continuance of its registration. 1.12 Change in Material Information 1.12.1 In terms of Regulation 15A(d) of the FVCI Regulations, if there is any change in the material information previously furnished by the FVCI to the DDP and/or SEBI, which has a bearing on the certificate granted by the DDP on behalf of the Board, it shall inform the DDP and/or the Board in writing, in the following manner: 1.12.1.1 Type I material changes shall be informed by FVCI as soon as possible and within seven working-days of the occurrence of the change and the supporting documents (if any) shall be provided within 30 days of such change. This category shall include critical material changes that I. render the FVCI ineligible for registration II. require FVCI to seek fresh registration III. render FVCI ineligible to make fresh investments IV. impact any privileges available or granted to the FVCI under the extant regulator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... until the jurisdiction/FVCI is compliant with the Regulations. The DDP shall inform to SEBI, details of such FVCIs upon such change. 1.13.2 However, the FVCI shall be permitted to sell the investments or continue to hold the investments already purchased by it as per the following timelines, whichever is later: (i) investments in listed securities, within 1 year from the date of change in status of the jurisdiction and other investments, within 2 years from the date such change, or (ii) until expiry of its existing registration block. 1.13.3 Further, in case the FVCI itself or its underlying investors contributing to the corpus of the FVCI more than the threshold as specified under Rule 9 of PML Rules or identified on the basis of control, come under the Sanctions List notified by the United Nations Security Council, no transaction (buy or sell) shall be permitted in the account of such FVCI and the respective DDP shall as soon as possible but not later than seven days notify such instances to SEBI. 1.14 Other Changes relating to FVCI 1.14.1 DDPs shall take note of the other changes such as change in Compliance Officer, change in contact details and address and update the records ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the Custodian / local intermediary will be required to collect constitution documents and Beneficial Owner (BO) related declarations (wherever applicable) of the FVCI and also, upload the evidence of KYC reliance on KRA. iii. Prospectus and Information Memorandum are acceptable in lieu of an official constitutional document. iv. Valid FATCA / CRS documentations is required to be submitted at the time of account opening. v. Intermediary can verify the PAN of FVCIs online from website authorized by the Income-Tax department. To clarify no certification of PAN document required from FVCIs. Alternatively, e-PAN issued by CBDT can also be produced by FVCI for KYC compliance without requiring any certifications. In such situations where the intermediary is relying on KRA, it shall verify the PAN and download the available documents from KRA. PAN is not mandatory for UBO, senior management and authorized signatories of FVCI. vi. PAN is not mandatory for UN entities/multilateral agencies exempt from paying taxes/filing tax returns in India. 2.3 Sharing of KYC documents with banks towards opening of bank accounts of FVCIs 2.3.1 Intermediaries are advised to share the relevant KYC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... means individual(s) as designated by the FVCI who holds a senior management position and makes key decisions relating to the FVCI. iv. No foreign company shall be entitled for exemption under Rule 9(3)(f) of PMLA Rules. v. In case of companies/ trusts represented by service providers like lawyers/ accountants, FVCIs shall provide information of the real owners/ effective controllers of those companies / trusts. If the BO exercises controls through means like voting rights, agreements, arrangement etc., the same shall also be specified. It is clarified that BO shall not be a nominee of another person and that the real BO shall be identified. 2.6 Periodic KYC review 2.6.1 KYC review means steps taken to ensure that documents, data or information collected under the due-diligence process are kept up-to-date and relevant by undertaking reviews of existing records on a periodical basis. 2.6.2 At the time of KYC review, custodian may seek confirmation from FVCIs as to whether there is any change in the documents/ information provided earlier. If there is any change, the FVCI shall provide the updated documents/ information to the custodian. The periodicity for KYC review of FVCIs, based ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntenance of records 2.8.1 The Custodian shall maintain the KYC records in original for a minimum period of five years from the date of cessation of the transactions with the said FVCI. In case any litigation is pending, these records should be maintained till the completion of the proceedings. 2.9 Guidelines for KYC: 2.9.1 Copies of all the documents submitted by the applicant shall be accompanied by originals for verification. In case the original of any document is not produced for verification, copies shall be properly attested by entities authorized for attesting the documents. 2.9.2 In lieu of physical attestation, certification of copies of original documents by authorized bank officials (i.e. officials of Multinational Foreign Banks or any Bank regulated by RBI) through SWIFT mechanism may be accepted for the purpose of verification of documents. The authorized bank official shall be required to send copies of original documents to the DDP digitally and certify the authenticity of these documents through authentic free format SWIFT message types (such as SWIFT MT 599) sent to the DDP. 2.9.3 If any proof of identity or address is in a foreign language, then translation into E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for registration for more than 30 days of receipt of application ** Reasons given regarding application(s) pending for more than 30 days ** * Indicate application type as 1. Fresh Registration 2. Continuance ** Applicable for application type Fresh Registration only. Annexure-1B Fee report 1. The report pertaining to a month to be submitted by DDPs to SEBI in the attached format: 2. If a DDP has not granted any registration/renewal of registration during the previous month, then it is required to send a Nil report. 3. The Bank account details to which the payment of foreign inward remittances is to be done electronically is as follows SWIFT FIELD DESCRIPTION INFORMATION TO BE GIVEN To: Bank Name CITI BANK N.A. Field 56 Swift Code CITIUS33XXX (Intermediary bank) Bank Clearing Code FED ABA 021000089 For credit to: Account Number* 36329377 ICICI BANK SWIFT CODE ICICINBBCTS ABA FED Number 021000089 Field 57 Beneficiary Bank ICICI Bank Ltd, Mumbai (India) Additional details required for crediting a Current Account : Ultimate beneficiary: Account Number* 055501001994 Field 59 Account Name Securities and Exchange Board of India Field 70 Brief Purpose Regulatory / Auxiliary Fees Field 71 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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