Sebi eases processing of FPI documents in lockdown-hit areas

By: |
August 31, 2020 7:13 PM

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 scanned copy.

Sebi provided the relaxation till June 30 and further extended till August 31.

Extending temporary relaxations in compliance requirement for foreign portfolio investors (FPI), Sebi on Monday allowed scanned copies of documents for renewing registration for them in the jurisdictions that continue to be under the lockdown to contain the spread of coronavirus. However, such relaxations will not be applicable for entities from jurisdictions where lockdown has already been lifted, the Securities and Exchange Board of India (Sebi) said in a circular.

Earlier in March, Sebi provided the relaxation till June 30 and further extended till August 31. It is understood that while lockdown has been lifted in many jurisdictions, certain jurisdictions continue to be under lockdown in view of the prevailing situation due to COVID-19 pandemic.

“In view of the representations received from various stakeholders, it has been decided that for the entities from jurisdictions which are still under lockdown, the temporary relaxations shall be extended to the entities from such jurisdictions till the time lockdown is lifted from such jurisdictions,” Sebi said.

Under the relaxation announced in March, depository participants and custodians need to process the request for registration, continuance, KYC and 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 e-mail IDs of their global custodians or existing clients where these details are already captured in records or e-mail IDs of new clients received from domains which are duly encrypted.

These documents can be uploaded on KRAs (KYC registration agencies) and other intermediaries may rely on the papers. Under Sebi guidelines, an FPI applicant needs to submit duly signed application form including KYC details and supporting documents and applicable fees. Further, copies of all the documents submitted by the applicant should be accompanied by originals for verification.

In case the original of any KYC document is not produced for verification, then the copies should be properly attested by entities authorized for attesting the documents. The regulator asked depository participants and custodians to ensure to obtain the original and/or certified documents within 30 days from the deadline.

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 scanned copy.

In case required documents for registration or KYC are not received by the deadline, the regulator had said the accounts of such FPIs will be blocked for any fresh purchase. Further, in case documents are still not received within three months of the deadline, depository participants and custodians will have to report these cases to Sebi for appropriate action.

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