Temporary relaxation in processing of documents pertaining to FPIs

In light of the recent events pursuant to COVID-19, a need was felt for temporary relaxations with respect to compliance requirements for Foreign Portfolio Investors (“FPIs”). Accordingly, Securities and Exchange Board of India (“SEBI”) on 30 March 2020, vide circular no. SEBI/HO/FPI&C/CIR/P/2020/056 granted the following relaxations pertaining to a situation where FPI applicants are unable to send original and/or certified documents as specified in Operational guidelines for Foreign Portfolio Investors & Designated Depository Participants (“DDPs”) issued under SEBI (FPIs) Regulations, 2019:

  • DDPs & Custodians may consider and process the request(s) for registration/ continuance/ KYC / KYC review & any other material change on the basis of scanned version of signed documents (instead of originals) and copies of documents which are not certified, received from:

a) e-mail IDs of their Global Custodians/existing clients where these details are already captured in records; or

b) e-mail IDs of new clients received from domains which are duly encrypted with Transport Layer Security (TLS) or similar encryption or the documents are password protected.

  • These documents may be uploaded on KYC Registration Agencies so that the other intermediaries may rely on said documents.

  • These temporary relaxations shall be applicable only till 30 June 2020.

  • Within 30 days from the aforesaid deadline, the DDPs & Custodians shall ensure to obtain the original and/or certified documents (as applicable normally).

  • In case required documents for registration/ KYC are not received by the said deadline, the accounts of such FPIs shall be blocked for any fresh purchase.

  • In case documents are still not received within 3 months of the said deadline, DDPs & Custodians shall report these cases to SEBI for appropriate action. Further, Intermediaries should undertake necessary due diligence including that required for regulatory and risk-based approach towards compliance with Anti-Money Laundering (AML) requirements while processing these documents based on scan copy.
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