Framework on Beneficial Owners of FPIs

INDORE, India - April 12, 2018 - PRLog -- Market regulator Sebi released a detailed framework so as to identify and verify beneficial owners of foreign portfolio investors (FPIs). Beneficial owner is the natural person, who ultimately owns or controls a foreign portfolio investor.

Beneficial ownership of foreign portfolio investors having company's structure or trust should be identified, on controlling ownership interest and control basis, under this framework.

According to Sebi, In the case of Partnership Company and unincorporated association of individuals, beneficial owners should be recognized on entitlement or ownership basis.

With the aim of bring consistency, the regulator has asked category-II & Category-III foreign portfolio investors to provide list of their beneficial owners in a prescribed format.

Besides, FPIs need to reveal their name and address of the beneficial owners, in case they are acting alone or together through one or more natural persons as group, with their name and address, tax residency jurisdiction, beneficial owners group's percentage shareholding capital or profit ownership in the FPIs.

As per Sebi, this list should be certified by foreign portfolio investor and such overseas investors should also certify that there are no other beneficial owners other than those mentioned in list. The existing FPIs should provide the list of beneficial owners within six months.

Further, non-resident Indians, overseas citizens of India can't be the beneficial owners of FPIs. If an FPI is in second category investment manager of other FPIs and is non-investing entity, it may be promoted by non-resident Indians (NRIs) or overseas citizens of India. The resident Indian cannot be a beneficial owner of FPI.

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