Sebi to review FPI rules, align with global norms

Mumbai: The Securities and Exchange Board of India will issue a consultation paper reviewing compliance requirements for foreign portfolio investors, Chairman Tuhin Kanta Pandey said on Wednesday.

Pandey said the market regulator has made progress in reducing the time taken to onboard overseas funds but acknowledged that compliance requirements in India remain more onerous than those in other jurisdictions.

"To facilitate foreign investor participation, we have streamlined access, eased digital onboarding and simplified procedures. We have harmonised several compliance requirements with those in major global jurisdictions," the Sebi chief said at an event. "At the same time, we recognise that some compliance requirements remain more onerous than those in other major jurisdictions. We are reviewing these requirements and will issue a consultation paper to seek views on aligning them with global standards," he said.


The Sebi has been engaging regularly with FPIs to identify areas of difficulty, he said. On self-listing of stock exchanges, he said: "Exchanges are also regulators, and if your own scrip is trading, you can't be a regulator on your own thing."

Globally, some jurisdictions allow self- listing but India's framework currently doesn't allow self- listing as it has multiple stock exchanges.

Read more: From 104 shareholders to nearly 80 lakh! Jio becomes India's most widely owned stock on listing day

"This is not something which is without pros and cons, and therefore we need to have wider consideration on that. We can also see whether there is a merit in really doing it or whether we can continue with the present model. Different options may be possible," Pandey said.

Adding that the proposal has not been ruled out, but it is not under active consideration either.

On the possibility of reviving closed regional stock exchanges, including the Calcutta Stock Exchange, Pandey said: "We do have a framework, and the framework doesn't preclude that no new exchanges would be permitted... Liquidity is a very important consideration. Just reviving an exchange is one thing, but whether you would be able to really make it feasible is another," Pandey said. He also said that exchanges would have to make continuous investment in technology to manage challenges emerging from artificial intelligence.

Read more: Sebi to review FPI compliance norms, issue consultation paper to align with global standards

"You have to invest very heavily in technology today, and the technological requirements will only grow manifold," he said.

Separately, in another event, the Sebi chief said, from November 1, direct plans will be the default option on digital platforms of AMCs.

"Investors choosing regular plans must be informed about their higher expense ratio," Pandey said. "Protection also depends on what investors are told."

The regulator is also reviewing the framework governing mainboard initial public offerings and follow-on public offers.