Sebi simplifies rule to pick key fund official in relief for FPIs
FPIs), the capital market regulator has simplified the rule for identifying senior management officials (SMOs) in these offshore funds.
The urgency to name a key official in an FPI is felt as it is often not possible to know who calls the shots in a fund which is often structured in multiple layers, with each vehicle in separate jurisdictions. Under the circumstances, the regulator had earlier said that the key official in the apex vehicle, which is at the top of the FPI chain, would be considered as the SMO.
This did not go down well with most funds as senior officials of the top entity in New York and London were reluctant to be named as SMOs of a Mauritius or Singapore FPI vehicle, several layers below.
Besides, these officials were not involved in the running of a FPI formed in a tax haven to trade on Indian stock exchanges.
Sensing the resistance among funds, the regulator has now clarified that key officials in the parent entity, at the top of an FPI chain, need not be named as SMO. In an email to FPI custodians on August 30, the Securities & Exchange Board of India (SEBI) said that the senior official in the registered FPI or the key official of the entity which controls or owns the FPI may be named as the SMO, two persons aware of the communication told ET.
«Only in cases where a branch of a bank is registered as an FPI with SEBI, the key official of the parent bank has to be named as SMO.
This was probably the original intent of the regulator. It has now been made clear.
This would help a lot of FPIs which have to disclose their SMOs by end September,» said one of the persons.
Thus, according to SEBI's latest communication, the directors of the FPI entity in Mauritius can be named as SMOs. Or, if there is an
