New Delhi: Markets regulator SEBI on Friday eased compliance requirements for Foreign Portfolio Investors (FPIs), extending the periodicity of Know Your Customer (KYC) reviews to up to eight years from the existing one to three years, in a move aimed at reducing the compliance burden and promoting ease of doing business.
Under the revised framework, the frequency of KYC reviews will depend on the risk category, type of FPI and its regulatory status.
For Category I FPIs registered under Regulation 5(a)(i), the KYC review period for those operating in high-risk jurisdictions has been extended to eight years, while for other entities in this category, it will be every two years.
For Category II FPIs operating in high-risk jurisdictions, KYC reviews will be required every two years.
In the case of non-high-risk jurisdictions, Category I FPIs will undergo KYC reviews every eight years.
For Category II FPIs, the review period will be eight years for regulated entities and two years for others.
"Currently, FPIs are subject to periodic KYC review annually or once every three years, depending on the applicable category and other criteria. The revised framework increases the periodicity from one year to two years and from three years to eight years," Sebi said in a statement.
However, the existing provisions for Government Securities (GS)-only FPIs and SWAGAT-FI FPIs will remain unchanged.
KYC reviews for GS-only FPIs will continue as per the periodicity applicable to their respective bank accounts, as prescribed by the Reserve Bank of India (RBI), while the review period for SWAGAT-FI FPIs will remain 10 years.
Additionally, Sebi has discontinued the requirement for FPIs to separately intimate changes in previously submitted information or furnish a no-change declaration at the time of continuation of registration.
"The measure seeks to rationalise multiple requirements of similar nature, reduce repetitive compliance and ease the compliance burden on FPIs, thereby promoting ease of doing business," Sebi said.
The revised provisions will come into effect from December 1, it added.
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