The Securities and Exchange Board of India (SEBI) will soon review its circular issued in April that barred Non-Resident Indians (NRIs), among others, from managing funds they invest in India.
The circular became contentious with an industry body estimating that it could lead to outflows of $75 billion, though the regulator brushed aside any such concerns.
On Wednesday, the capital markets regulator said that a working group constituted under H.R. Khan, former RBI deputy governor, met with industry participants and would soon give its recommendations to SEBI, which would then review the entire matter.
“The working group has heard various stakeholders, has held consultations, and is in the process of giving its recommendations. Ministry of Finance, Government of India, has also been consulted on various issues. Based on these inputs, SEBI would review the matter and shortly take a holistic view,” SEBI said in a statement on Wednesday. On April 10, SEBI issued a circular stating that entities like NRIs, Person of Indian Origin (PIO) and Overseas Citizen of India (OCI) cannot be the beneficial owners of any foreign portfolio investor (FPI).
Six-month deadline
It further stated that FPIs that did not comply with the framework would be given six months to either change their structure or wind up their positions in India. Last month, SEBI extended the deadline till December 31.
On Monday, the Asset Managers Roundtable of India (AMRI) said that the SEBI diktat was “opaque” and that it “distrusts” the NRI community. Hence, the regulator should review it.
