Friday, the market regulator Sebi granted permission to asset management companies (AMCs) to provide management and advisory services to all Foreign Portfolio Investors (FPIs) based at International Financial Services Centres (IFSCs). The Securities and Exchange Board of India (Sebi) stated in a circular that this is subject to certain conditions, including that these Foreign Portfolio Investors (FPI) will be permitted to invest in mutual fund schemes other than those that fall under the category of “thematic.”
It stated that FPIs will not be permitted to take a contra-position for six months following the date of purchase or sale of equity and equity derivative securities listed on recognized stock exchanges in India.
According to Sebi, it has been decided that AMCs may also provide management and advisory services to FPIs that operate from IFSC and are regulated by the International Financial Services Centres Authority (IFSCA). These FPIs are not included in the categories of FPIs that Sebi specified in its circular issued in December 2019.
Based on requests from AMCs and discussions with IFSCA, the decision has been made.
AMCs were permitted to provide management and advisory services to appropriately regulated FPIs, such as pension funds, insurance companies, and banks, by Sebi earlier in December 2019.
AMCs were also permitted to offer these kinds of services to investors who were related to the government, such as central banks, sovereign wealth funds, international or multilateral organizations or agencies, and any other entities that were controlled by these investors or owned at least 75% directly or indirectly by them.
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