SEBI mulls boosting NRI/ OCI participation in IFSC-based FPIs. Details here

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The Securities Exchange Board of India (SEBI) has been long considering enhancing investments by Foreign Portfolio Investors (FPIs) in India by facilitating increased participation from non-resident Indians (NRIs), Overseas Citizens of India (OCIs), Resident Indians (RIs) as constituents of FPIs that are based out of International Financial Services Centre (IFSC) in Gandhinagar, Gujarat, India. IFSC is regulated by the Internal Financial Services Centre Authority (IFSCA).

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The current FPI regulations issued by SEBI states that NRIs or OCIs or RIs may be constituents of the FPI, however, the contribution of a single NRI or OCI or RI shall be below 25% of the total contribution in the corpus of the FPI and the aggregate contribution of NRIs, OCIs and RIs shall be below 50% of the total contribution in the corpus of the FPI.

Over the years, there has been a constant demand for channelling more NRI/ OCI/ RI investments in the Indian securities markets by facilitating greater participation of NRIs/ OCIs/ RIs in the corpus of the FPIs. The Hon’ble Finance Minister had also acknowledged in the budget speech in July 2019 that even though India is the world's top remittance recipient, NRI investment in Indian capital markets is comparatively less.

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NRIs/ OCIs can currently invest directly in India through the Portfolio Investment Scheme (PIS) route. However, the PIS route restricts NRIs from investing in India through overseas pooled structures managed by professional managers, thereby depriving them of the benefit of investment management by professionals.

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