NOTE ON FOREIGN PORTFOLIO INVESTOR (FPI) IN INDIA

1. INTRODUCTION:

 

Foreign portfolio investment (FPI) consists of securities and other financial assets held by investors in another country. It does not provide the investor with direct ownership of a company’s assets and is relatively liquid depending on the volatility of the market. Along with foreign direct investment (FDI), FPI is one of the common ways to invest in an overseas economy. FDI and FPI are both important sources of funding for most economies.

 

1. CATEGORIES OF FPI’S:

 

1. All Insurance entities – Category I;
2. Funds from FATF member countries – Category I ;
3. Funds from non-FATF member countries – Category II

 

1. ELIGIBILITY AND CRITERIA:

 

– Should not be a person resident in India

– Should be a resident of a country which is a signatory to bilateral Memorandum of Understanding with SEBI or should be a resident of a country whose securities market regulator is a signatory to International Organisation of Securities Commission’s Multilateral Memorandum of Understanding

– Should not be resident of a country identified in the public statement of Financial Action Task Force (FATF) as:

1. a) A jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply, or
2. b) a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the FATF to address the deficiencies.

– If the applicant is a Bank, it should be resident of a country whose Central Bank is a member of the Bank for International Settlements (BIS)

– Should not be a Non Resident Indian (NRI)

– Should be legally permitted to invest in Securities outside his country

– In case of a corporate, trust, etc (i.e any person which is not an individual) should be authorized by its Memorandum of Association (MOA) & Articles of Association (AoA), or equivalent document.

– Should have sufficient experience, good track record, be professionally competent, be financially sound, and generally good reputation of fairness and integrity.

– Should be a fit and proper person based on the criteria specified in Schedule II of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008.

 

1. REQUIRED DOCUMENTS:

 

• Application Form A (completed and signed)
• KYC documents (passport, proof of address, etc.) for applicant and beneficial owners
• Memorandum and Articles of Association (for companies)
• Board resolution authorizing FPI registration
• FATCA or CRS form
• Financial statements and business information
• Additional documents requested by SEBI or DDP

 

1. REGISTRATION FEES:

 

The specific fees for FPI registration in India applicable to your situation can vary depending on two main factors:

1. Designated Depository Participant (DDP): Different DDPs might have slightly different fee structures.
2. FPI Category: SEBI categorizes FPIs based on investment size and risk profile, and each category has a different registration fee.

 

1. FPI VS. FOREIGN DIRECT INVESTMENT (FDI):

 

• With FPI—as with portfolio investment in general—an investor does not actively manage the investments or the companies that issue the investments. They do not have direct control over the assets or the businesses.
• In contrast, foreign direct investment (FDI) lets an investor purchase a direct business interest in a foreign country. For example, say an investor based in New York City purchases a warehouse in Berlin to lease to a German company that needs space to expand its operations. The investor’s goal is to create a long-term income stream while helping the company increase its profits.

 

1. PLACE OF RENDERING SERVICES:

 

The place of rendering services generally shall be your office or our office situated at Off No. 106, B wing, Sr. No. 55, Sukhniwas, Mangalwar Peth, Pune-411011.

 

1. PROFESSIONAL FEES:

The Professional fees for obtaining FPI registration will be as per below table.

Sr No	Particular	FEES INR
1.	Fess for FPI Registration	To be discussed in the meeting
2.	Government Fees	Government Fess Will be at Actual

THANKING YOU!

SD/-

PRAMODKUMAR R. LADDA

Company Secretary & Insolvency Professional