In a major revision to the Foreign Portfolio Investors (FPI) Regulations, the Securities and Exchange Board of India (SEBI) has substituted a payment system denominated in rupees for the previous one, which was based on US dollars. After six months, the updated framework will be put into effect, giving market intermediaries and international investors the time to adjust.
The new regulations have changed the registration fee from $1,000 to Rs 90,000 and the fee for Category-I Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs) from $2,500 to Rs 2.3 lakh. The revised regulations also include SEBI’s new continuation and late charge structure.
Transferring the collected registration fees to SEBI within five working days of obtaining registration is now mandatory for Designated Depository Participants (DDPs) to achieve better transparency. Financial reporting and operational efficiency are both anticipated to be enhanced by this solution.
Additionally, SEBI has streamlined the FPI registration procedure by including the applicant’s date of birth or incorporation on the standard application form. In line with the CBDT notification that was released earlier this year, the modification facilitates easier Permanent Account Number (PAN) applications.
Manual accounting, complicated invoicing, lack of visibility into accounting in real-time, and delays in financial reporting are some of the operational issues that SEBI claims will be eliminated with the move to a rupee-based fee system from the dollar-based model. The previous yearly payment of Rs 10 lakh has been replaced with a monthly cost of Rs 85,000 for custodians.
Image: The Hans India
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