CIRCULAR
SEBI/HO/AFD/P/CIR/2023/043
March 27, 2023
To,
1. All Foreign Portfolio Investors (“FPIs”) through their Designated Depository
Participants (“DDPs”)
2. All Designated Depository Participants (“DDPs”) and Custodians
3. The Depositories (NSDL and CDSL)
Dear Sir/ Madam,
Sub: Streamlining the onboarding process of FPIs
1. SEBI (Foreign Portfolio Investors) (Amendment) Regulations, 2023 were notified
on March 14, 2023, for streamlining the onboarding process of FPIs.
2. In terms of Regulation 3 (2) of the SEBI (Foreign Portfolio Investors) Regulations,
2019 (hereinafter referred to as ‘FPI Regulations’), an application for the grant of
certificate as a foreign portfolio investor shall be made to a Designated Depository
Participant (’DDP’) in the Form and manner specified by the Government or the
Board from time to time and shall be supported by the fee specified in Part A of
the Second Schedule and any documents in the manner specified by the Board
from time to time.
3. Accordingly, in order to ease the onboarding process of FPIs and reduce the time
taken for granting registration and opening of demat, trading and bank accounts
of FPIs, the following modifications to the ‘Master Circular for Foreign Portfolio
Investors, Designated Depository Participants and Eligible Foreign Investors’,
issued vide SEBI Circular No. SEBI/HO/AFD-2/CIR/P/2022/175 dated December
19, 2022 (hereinafter referred to as ‘Master Circular’) are specified:
a. Grant of FPI registration on the basis of scanned copies of application
forms and supporting documents:
i. The DDP may grant FPI registration to the applicant on the basis of
scanned copies of executed Common Application Form (‘CAF’), scanned
copies of certified supporting documents and applicable fees submitted by
the applicant.
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ii. The DDP shall thereafter update the CAF module as per the standard
process, for issuance of Permanent Account Number (‘PAN’).
iii. Post allotment of PAN to the applicant, the scanned copies of certified
Know Your Client (‘KYC’) documents of the applicant shall be uploaded
on the KYC Registration Agencies (‘KRA’) by the DDP/ Custodian. Other
intermediaries/ entities may access such documents from the KRA and
complete their KYC requirements for opening the demat, trading and bank
accounts.
iv. The Custodian shall ensure that appropriate systems and procedures are
in place to prevent any activity in such accounts till verification of physical
documents is carried out.
v. Only upon receipt and verification of the physical documents by the DDP/
Custodian, the Custodian shall make an application to the Clearing
Corporation (‘CC’) for allotment of a CP Code to the FPI and carry out
necessary steps for enabling the FPI to transact in the Indian securities
markets.
b. Use of Digital Signatures by FPIs:
i. FPIs may use digital signatures for the purpose of execution of CAF and
other registration related documents, provided such digital signatures are
in accordance with the provisions of the Information Technology Act,
2000.
c. Certification of copies of original documents by authorized bank officials
using SWIFT mechanism:
i. At present, copies of all documents submitted by the FPI applicants are to
be accompanied with originals for verification. In case the original of any
document is not produced for verification, then the copies are required to
be physically attested by entities authorized for attesting the documents,
as mentioned in Para 8 of Part B of the Master Circular.
ii. 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
by DDPs/ Custodians for the purpose of verification of documents.
iii. The authorized bank official shall be required to send copies of original
documents to the DDP/Custodian digitally and certify the authenticity of
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these documents through authentic free format SWIFT message types
(such as SWIFT MT 599) sent to the DDP/ Custodian.
d. Verification of PAN through the CAF module available on the websites of
the Depositories:
i. In cases where PAN application by the FPI applicant is made via the CAF
portal, the DDP/Custodian may verify the PAN of the FPI basis its
availability on the CAF module hosted on the website of the depositories,
where the PAN is reflected via an automated secure feed from the Income
Tax department.
e. Submission of unique investor group ID by FPI applicants in lieu of
complete details of group constituents:
i. At present, an FPI applicant, at the time of registration, is required to
provide details of FPIs with whom it share ownership of more than fifty
percent or common control, under the ‘Clubbing of Investment Limit’
section of the CAF. Depositories in turn generate a unique FPI investor
group ID for identifying each such FPI investor group.
ii. For operational convenience, it is now specified that in case an FPI
applicant belongs to an existing FPI investor group, it may submit its
unique FPI investor group ID in the CAF, in lieu of providing complete
details of all group constituents. In case the applicant wants to club
additional FPIs (apart from itself) in such unique investor group ID, the FPI
may only provide details of such additional FPIs, along with the investor
group ID.
4. In addition to the aforesaid, the following provisions of the Master Circular shall
stand modified as under, in order to bring consistency with the provisions of the
FPI Regulations:
a. The term ‘forthwith’ mentioned at paragraphs 9 (iv), 12 (iii), 14 (i) of Part
A and in Annexure H of the Master Circular, shall be read as ‘as soon as
possible but not later than seven working days’.
b. The term ‘forthwith’ mentioned at paragraphs 14 (iii), 15 (i) of Part A and
paragraph 1 (vi) of Part C of the Master Circular, shall be read as ‘as soon
as possible but not later than two working days’.
5. The provisions of this circular shall be applicable with immediate effect.
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6. This circular is issued in exercise of powers conferred under Section 11 (1) of the
Securities and Exchange Board of India Act, 1992.
7. A copy of this circular is available at the web page “Circulars” on our website
www.sebi.gov.in.
Yours faithfully,
Sanjay Singh Bhati
Deputy General Manager
Tel No.: 022 – 26449222
E-mail: ssbhati@sebi.gov.in
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