SEBI simplifies procedures for FIIs

MUMBAI, NOV. 27. In a bid to simplify procedures for foreign investment in markets, the Securities and Exchange Board of India (SEBI) is to allow foreign institutional investors to complete the transaction for their clients before the registration of the party.

``The FIIs can go ahead with clients order and do the registration later in a day or two thereby saving them time as well as carry out the investments", SEBI executive director, Mr. O. P. Gherotra, told newsmen after a meeting with representatives of FIIs and custodians here today.

``With this step, foreign investors will not have to worry about procedural hassle, he said adding this did not involve any policy change. He said ``the simplification in procedure applies for both the new and existing clients. When FIIs want to open a second account for existing customer, it will have to be with the same custodian", Mr. Gherotra added.

The FIIs and custodian welcomed the SEBI initiative for rolling settlement and emphasised that liquidity in market should get top priority, he said.

Mr. Gherotra said a technical group has been set up to simplify FIIs trade reporting system. At present, foreign funds submit transaction details daily on a floppy to the regulator.

The group would study the feasibility of electronic (on-line) reporting and would submit a report next week, SEBI board member, Mr. J. Verma, said. He said the group would look into safety of system for on-line electronic transfer and select the appropriate software for it.

The capital market regulator has also set up a committee for bringing uniformity in settlement standards under his chairmanship.

At present, there were different systems working for settlements, creating delays and errors, and ``it should be possible for one single instruction to flow through the system for seamless processing", he said.

Asked if FIIs were withdrawing funds from the Indian market, Mr. Verma said foreign funds have told SEBI that ``it is part of a general trend for developing markets and money was flowing to developed markets where interest rates are ruling high."