Common KYC on norms for FIIs to attract more investment: P Chidambaram

NEW DELHI: India is working on a common know your customer (KYC) norms for foreign institutional investors to attract more overseas investment into the country, finance minister P Chidambaram has said.

“The government is working on converging all KYC norms and they ( FIIs) will have common KYCs... The government will soon come out with a new set of norms that will have a common KYC across various regulators. Be it pension, banking, stocks or insurance, there should be one KYC,” he told the Rajya Sabha.

He said if a new FII applies in India, it has to go through due diligence and once registered it has to go through KYC norms. At present there are 1,756 FIIs registered in the country, he said, adding that it takes a maximum of three weeks for an FII to register with market regulator Securities and Exchange Board of India ( Sebi).

The finance minister was replying to members' queries when the Securities and Exchange Board of India (Amendment) Bill, 2013 was taken up for consideration and passage in the Rajya Sabha.

The Bill, which sought appointment of a retired or serving High Court judge, who have held the position for seven years, for heading the Securities Appellate Tribunal (SAT), was passed by voice vote.

According to existing provisions, only a serving or retired Supreme Court judge, or the chief justice of a high court can head the Tribunal, but government was finding it difficult to fill the slot.

“We have been trying to find a suitable judge. Unfortunately, despite best efforts of the Chief Justice, we are not able to find a suitable candidate to fill the vacancy,” he said.

He, however, said notwithstanding the amendment, the government will continue to make efforts to fill the vacancy as per the first criterion of a retired or sitting Supreme Court judge or Chief Justice of a High Court.

“The Chief Justice has assured me that he is still making efforts to ensure that a sitting or retired Supreme Court judge or Chief Justice of a High Court” takes up as presiding officer of the tribunal.

The finance minister said stock markets have risen 25 per cent and have given a good return, and hoped more foreign investment coming in the stock markets will give further returns to investors.

Chidambaram said during the year 2012 FIIs had invested $31 billion in the country and during the current calendar the investment stood at $10 billion.