Date: 2022-01-14Category: Extra OrdinaryState: Union GovernmentCountry: India
In exercise of the powers conferred by sub section 1 of Section 30 read with sub section 1 of Section 11 clause ba of sub section 2 of Section 11 and sub sections 1 and 1A of Section 12 of the Securities and Exchange Board of India Act 1992
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**Report on Securities and Exchange Board of India Foreign Portfolio Investors Amendment Regulations, 2022**
**1. Executive Summary:**
This report analyzes the Securities and Exchange Board of India (SEBI) Foreign Portfolio Investors Amendment Regulations, 2022, as published in the Gazette of India on January 14, 2022. This amendment modifies the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019. The key changes include substituting "National Securities Depositories Limited" with "the Board" in subregulation 1 of regulation 7 and introducing a new regulation, 43B, which grants the Board the power to provide exemptions from strict enforcement of the regulations under specific conditions. This amendment is intended to provide SEBI with greater flexibility in enforcing regulations and to address situations where non-compliance is beyond the control of the foreign portfolio investor or due to procedural/technical reasons.
**2. Introduction:**
This report aims to provide an informative overview of the Securities and Exchange Board of India Foreign Portfolio Investors Amendment Regulations, 2022, based solely on the text of the official notification. The report outlines the key changes introduced by the amendment and their potential implications for Foreign Portfolio Investors (FPIs).
**3. Policy Overview:**
* This document is an *amendment* to the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
* **Core Objective(s):** The core objective of *this specific amendment*, as inferred from the text, is to grant the Securities and Exchange Board of India (SEBI) greater flexibility in the enforcement of its regulations regarding Foreign Portfolio Investors (FPIs). This is achieved by providing SEBI with the power to grant exemptions from strict enforcement under certain circumstances.
**4. Background and Rationale:**
The amendment appears to address the need for flexibility in applying FPI regulations. The introduction of Regulation 43B suggests that SEBI recognized situations where strict enforcement might be impractical or unfair. This could include instances where non-compliance is due to factors outside the FPI's control or when the violation is of a minor, procedural nature. By introducing the possibility of exemptions, SEBI aims to balance regulatory compliance with the practical realities faced by FPIs, potentially promoting market efficiency and investor confidence.
**5. Key Provisions / Changes:**
This is an amendment, so the focus is on the changes.
* **Change 1:** Subregulation 1 of regulation 7 of the original regulations is amended. "National Securities Depositories Limited" is *replaced* with "the Board." The effect of this change likely shifts the responsibility or authority previously held by the National Securities Depositories Limited to the SEBI board itself. The text doesn't explain precisely what that responsibility *was*.
* **Change 2:** A new regulation, 43B, is *inserted* after regulation 43A. This new regulation provides the core of the amendment:
* **New Rule/Provision:** The Board may, either on its own initiative (suo motu) or based on an application from an FPI, grant relaxation from strict enforcement of the regulations. This is contingent upon:
* Reasons being recorded in writing.
* Conditions deemed fit by the Board being imposed in the interests of investors and the securities market.
* The Board being satisfied that non-compliance was due to factors beyond the entity's control OR the requirement was procedural or technical in nature.
* **Effect of this Change:** This gives SEBI the power to offer exemptions, introducing a degree of discretion into the enforcement process. It provides a mechanism to avoid penalizing FPIs for unintentional or unavoidable breaches of regulations.
* The application for exemption requires a non-refundable fee of US$1,000, payable via NEFT, RTGS, IMPS, or other RBI-approved methods to a designated SEBI bank account.
**6. Target Audience and Stakeholders:**
The primary target audience is **Foreign Portfolio Investors (FPIs)** registered with SEBI. Other stakeholders include the Securities and Exchange Board of India (SEBI) itself, legal and compliance professionals advising FPIs, and potentially the broader securities market, as these changes may impact market stability and investor sentiment.
**7. Implementation Aspects (Inferred):**
* **Responsible Agency/Bodies:** The Securities and Exchange Board of India (SEBI) is the primary responsible body. Specifically, "the Board" (referring to the SEBI Board) holds the authority to grant exemptions.
* **Timelines/Procedures:**
* The amendment came into force on January 14, 2022 (date of publication in the Official Gazette).
* FPIs seeking exemption must submit an application to the Board, accompanied by a non-refundable fee of US$1,000. The application process and the criteria for granting exemptions are not detailed within the provided text, but the Board must record the reasons for granting relaxation in writing.
**8. Expected Outcomes / Impact of Changes:**
The likely intended outcome of these specific changes is to provide SEBI with greater flexibility and discretion in enforcing FPI regulations. Regulation 43B could result in:
* Reduced instances of penalties for FPIs facing unavoidable or minor compliance breaches.
* Potentially increased efficiency in regulatory enforcement, as SEBI can focus resources on more significant violations.
* Improved FPI confidence due to the availability of an exemption mechanism.
* Potentially reduced litigation related to minor compliance issues.
The shift of responsibility from the "National Securities Depositories Limited" to "the Board" could lead to a change in how certain processes are handled, but the precise impact isn't discernible from the provided text.
**9. Conclusion:**
The Securities and Exchange Board of India Foreign Portfolio Investors Amendment Regulations, 2022 introduces key changes focused on providing SEBI with greater flexibility in enforcing its regulations. By empowering the Board to grant exemptions under specific conditions, the amendment seeks to balance regulatory compliance with the practical challenges faced by FPIs. These changes are significant for all FPIs operating in the Indian securities market. The introduction of application fees should be considered by the FPIs.
Key Entities Referenced
NEW DELHI: Location of publication, likely the capital of India.
FRIDAY, JANUARY 14, 2022: Date of publication of the Gazette of India.
PAUSHA 24, 1943: Date in the Saka calendar, corresponding to January 14, 2022.
THE GAZETTE OF INDIA: Official government publication of India.
SECURITIES AND EXCHANGE BOARD OF INDIA: Regulatory body for the securities market in India, often referred to as SEBI.
Mumbai: City where the Securities and Exchange Board of India issued the notification.
SECURITIES AND EXCHANGE BOARD OF INDIA FOREIGN PORTFOLIO INVESTORS AMENDMENT REGULATIONS, 2022: Title of the amendment regulations being published.
SEBILADNROGN202264: Notification number assigned by the Securities and Exchange Board of India.
Securities and Exchange Board of India Act, 1992: The Act under which SEBI derives its powers.
Section 30: Section of the Securities and Exchange Board of India Act, 1992, conferring powers.
Section 11: Section of the Securities and Exchange Board of India Act, 1992, conferring powers.
Section 12: Section of the Securities and Exchange Board of India Act, 1992, conferring powers.
Depositories Act, 1996: Act related to depositories in the securities market.
Section 25: Section of the Depositories Act, 1996, conferring powers.
Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019: The original regulations being amended.
National Securities Depositories Limited: Name of a securities depository, being replaced by 'the Board' in the amendment.
Chapter VIIIA: Chapter in the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
regulation 43A: Regulation in the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
regulation 43B: New regulation being inserted into the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
US 1,000: Amount of nonrefundable fee for application.
NEFT RTGS IMPS: Electronic Funds Transfer Systems.
Reserve Bank of India: Central bank of India.
AJAY TYAGI: Chairman of the Securities and Exchange Board of India.
September 23, 2019: Date of publication of the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
SEBILADNROGN201936: Notification number of the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
19th December, 2019: Date of amendment to the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
Securities and Exchange Board of India Foreign Portfolio Investors Amendment Regulations, 2019: Amendment regulations for FPIs.
SEBILADNROGN201944: Notification number for the amendment regulations dated 19th December, 2019.
7th April, 2020: Date of amendment to the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
Securities and Exchange Board of India Foreign Portfolio Investors Amendment Regulations, 2020: Amendment regulations for FPIs.
SEBILADNROGN202009: Notification number for the amendment regulations dated 7th April, 2020.
17th April, 2020: Date of amendment to the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
Securities and Exchange Board of India Regulatory Sandbox Amendment Regulations, 2020: Amendment regulations for regulatory sandbox.
SEBILADNROGN202010: Notification number for the amendment regulations dated 17th April, 2020.
3rd August, 2021: Date of amendment to the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
Securities and Exchange Board of India Regulatory Sandbox Amendment Regulations, 2021: Amendment regulations for regulatory sandbox.
SEBILADNROGN202130: Notification number for the amendment regulations dated 3rd August, 2021.
SEBILADNROGN202132: Notification number for the amendment regulations dated 3rd August, 2021.
26th October, 2021: Date of amendment to the Securities and Exchange Board of India Foreign Portfolio Investors Regulations, 2019.
Securities and Exchange Board of India Foreign Portfolio Investors Second Amendment Regulations, 2021: Amendment regulations for FPIs.
SEBILADNROGN202154: Notification number for the amendment regulations dated 26th October, 2021.
Government of India Press, Ring Road, Mayapuri, New Delhi110064: Location of the printing press.
Controller of Publications, Delhi110054: Publisher of the Gazette of India.
रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99
सी.जी.-एम.एच.-अ.-14012022-232644
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असाधारण
EXTRAORDINARY
भाग III—खण्ड 4
PART III—Section 4
प्राजधकार स ेप्रकाजित
PUBLISHED BY AUTHORITY
स.ं 25] िई ददल्ली, िक्रु िार, िििरी 14, 2022/पौष 24, 1943
No. 25] NEW DELHI, FRIDAY, JANUARY 14, 2022/PAUSHA 24, 1943
भारतीय प्रजतभजू त और जिजिमय बोड ड
अजधसचू िा
मुम्बई, 14 िििरी, 2022
भारतीय प्रजतभजू त और जिजिमय बोड ड
(जिदिे ी पोर्फड ोजलयो जिििे क) (सिं ोधि) जिजियम, 2022
स.ं Ôãñºããè/ †Êã.†.¡ãè.-†¶ã.‚ããÀ.‚ããñ/•ããè.†¶ã./2022/64.—भारतीय प्रजतभूजत और जिजिमय बोड,ड भारतीय
प्रजतभूजत और जिजिमय बोडड अजधजियम, 1992 की धारा 11 की उप-धारा (1), धारा 11 की उप-धारा (2) के खडं (खक)
तथा धारा 12 की उप-धारा (1) एि ं (1क) के साथ पठित धारा 30 की उप-धारा (1) द्वारा, और जिक्षेपागार अजधजियम,
1996 की धारा 25 के तहत, प्रदाि की गई िजियों का प्रयोग करत े हुए, एतद्द्वारा, भारतीय प्रजतभूजत और जिजिमय बोड ड
(जिदेिी पोर्डफोजलयो जििेिक) जिजियम, 2019 का और संिोधि करिे के जलए जिम्नजलजखत जिजियम बिाता ह,ै
अथाडत,् —
1. इि जिजियमों को भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जििेिक) (संिोधि) जिजियम, 2022
कहा िा सकेगा ।
2. ये जिजियम रािपत्र म ेंइिके प्रकािि की तारीख को लागू होंग े ।
3. भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जििेिक) जिजियम, 2019 म,ें —
269 GI/2022 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
I. जिजियम 7 के उप-जिजियम (1) म,ें िब्दों “िेििल जसक्यूठरर्ीज़ जडपॉजज़र्रीज़ जलजमर्ेड” के स्ट्थाि पर, िब्द “बोड”ड
आ िाएगा ।
II. अध्याय VIII-क म,ें जिजियम 43क के बाद, जिम्नजलजखत जिजियम िोडा िाएगा, अथाडत,् —
“दसू रे मामलों म ेंजिजियमों के कडाई स ेलाग ूहोिे स ेछूर्
43ख. (1) बोडड स्ट्िप्ररेणा स ेया जिदेिी पोर्डफोजलयो जििेिक द्वारा आिेदि दकए िाि ेपर, ऐसे कारणों स ेिो
जलजखत रूप म ेंदि डदकए िाएगं,े इि जिजियमों के दकसी प्रािधाि के कडाई स ेलाग ूहोिे के संबंध म ेंऐसी ितों के
तहत छूर् प्रदाि कर सकेगा, िो बोडड जििेिकों तथा प्रजतभूजत बािार (जसक्यूठरर्ीज़ माकेर्) के जहत म ेंऔर प्रजतभूजत
बािार के जिकास के जलए लगािा िीक समझ,े यदद बोडड इस बात स ेसंतुष्ट हो िाए दक:
(क) पालि ऐस ेकारणों स ेिहीं हो पाया, िो एंठर्र्ी के जियंत्रण के बाहर थ;े या
(ख) िह अपक्षे ा प्रदक्रया-संबंधी अपक्षे ा या तकिीकी अपेक्षा िैसी ह ै।
(2) उप-जिजियम (1) म ेंयथा उजल्लजखत आिेदि के साथ, 1,000 अमरीकी डॉलर की फीस (लौर्ाई ि िािे
िाली) बोडड के संबंजधत बैंक खाते म ेंएिईएफर्ी / आरर्ीिीएस / आईएमपीएस के िठरए या भारतीय ठरज़िड
बैंक द्वारा अिुमत दकसी अन्य माध्यम स ेिमा करिाई िाएगी ।”
अिय त्यागी, अध्यक्ष
[जिज्ञापि-III/4/असा./580/2021-22]
पाद ठर्प्पण:
1. भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जििेिक) जिजियम, 2019, स.ं सेबी/एल.ए.डी.-
एि.आर.ओ./िी.एि./2019/36 द्वारा, 23 जसतम्बर, 2019 को भारत के रािपत्र म ेंप्रकाजित हुए थ े ।
2. भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जििेिक) जिजियम, 2019 तत्पश्चात,् —
(1) 19 ददसम्बर 2019 को भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जििेिक) (संिोधि)
जिजियम 2019, स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2019/44, द्वारा
(2) 7 अप्रैल 2020 को भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जििेिक) (संिोधि)
जिजियम 2020, स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2020/09, द्वारा
(3) 17 अप्रलै 2020 को भारतीय प्रजतभूजत और जिजिमय बोडड (रेग्यूलेर्री सैंडबॉक्स) (संिोधि) जिजियम,
2020, स.ं सेबी/एल.ए.डी.-एिआरओ/िीएि/2020/10, द्वारा
(4) 3 अगस्ट्त 2021 को भारतीय प्रजतभूजत और जिजिमय बोड ड (रेग्यूलेर्री सैंडबॉक्स) (संिोधि) जिजियम,
2021, स.ं सेबी/एलएडी-एिआरओ/िीएि/2021/30, द्वारा
(5) 3 अगस्ट्त 2021 को भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जििेिक) (संिोधि)
जिजियम 2021, स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2021/32, द्वारा
(6) 26 अिूबर 2021 को भारतीय प्रजतभूजत और जिजिमय बोडड (जिदेिी पोर्डफोजलयो जिििे क) (दसू रा
संिोधि) जिजियम 2021, स.ं सेबी/एल.ए.डी.-एि.आर.ओ./िी.एि./2021/54, द्वारा
संिोजधत हुए थ े ।[भाग III—खण् ड 4] भारत का रािपत्र : असाधारण 3
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 14th January, 2022
SECURITIES AND EXCHANGE BOARD OF INDIA (FOREIGN PORTFOLIO INVESTORS)
(AMENDMENT) REGULATIONS, 2022
No. SEBI/LAD-NRO/GN/2022/64.—In exercise of the powers conferred by sub-section (1) of Section 30
read with sub section (1) of Section 11, clause (ba) of sub-section (2) of Section 11 and sub-sections (1) and
(1A) of Section 12 of the Securities and Exchange Board of India Act, 1992, and under Section 25 of the
Depositories Act, 1996, the Securities and Exchange Board of India hereby, makes the following regulations,
to further amend the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019,
namely,—
1. These Regulations may be called the Securities and Exchange Board of India (Foreign Portfolio Investors)
(Amendment) Regulations, 2022.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019,—
I. In sub-regulation (1) of regulation 7, the words “National Securities Depositories Limited” shall be
substituted with the word “the Board”.
II. In Chapter VIII-A, after regulation 43A, the following regulation shall be inserted, namely,–
“Exemption from strict enforcement of the regulations in other cases.
43B. (1) The Board may suo motu or on an application made by a foreign portfolio investor, for reasons
recorded in writing, grant relaxation from the strict enforcement of any of the provisions of these
regulations, subject to such conditions as the Board deems fit to impose in the interests of investors and the
securities market and for the development of the securities market, if the Board is satisfied that:
(a) the non-compliance is caused due to factors beyond the control of the entity; or
(b) the requirement is procedural or technical in nature.
(2) The application referred to under sub-regulation (1) shall be accompanied by a non-refundable fee of
US $ 1,000 payable by way of NEFT/ RTGS/ IMPS or any other mode allowed by the Reserve Bank of
India in the designated bank account of the Board.”
[ADVT.-III/4/Exty./580/2021-22]
AJAY TYAGI, Chairman
Footnote:
1. The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 were published in
the Gazette of India on September 23, 2019 vide No. SEBI/LAD-NRO/GN/2019/36.
2. The Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 were subsequently
amended on, –
(1) 19th December, 2019 by the Securities and Exchange Board of India (Foreign Portfolio Investors)
(Amendment) Regulations, 2019 vide No. SEBI/LAD-NRO/GN/2019/44.
(2) 7th April, 2020 by the Securities and Exchange Board of India (Foreign Portfolio Investors)
(Amendment) Regulations, 2020 vide No SEBI/LAD-NRO/GN/2020/09.
(3) 17th April, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment)
Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/10.
(4) 3rd August, 2021, by the Securities and Exchange Board of India (Regulatory Sandbox)
(Amendment) Regulations, 2021, vide No. SEBI/LAD-NRO/GN/2021/30.4 THE GAZETTE OF INDIA : EXTRAORDINARY [PART III—SEC.4]
(5) 3rd August, 2021 by the Securities and Exchange Board of India (Foreign Portfolio Investors)
(Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/32.
(6) 26th October, 2021 by the Securities and Exchange Board of India (Foreign Portfolio Investors)
(Second Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/54.
Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064
and Published by the Controller of Publications, Delhi-110054.