More than 1,200 new foreign investors were registered with SEBI in the first 10 months of the ongoing fiscal, primarily due to their continued interest in the Indian capital markets, latest data from the regulator showed.
This comes on top of about 3,500 new foreign portfolio investors (FPIs) registered with SEBI in the last financial year.
According to the SEBI data, the number of FPIs with the regulatory approval increased to 9,083 at the end of January 2018, from 7,807 at March 2017, resulting in an addition of 1,276 such investors.
Arvind Chari, head of fixed income and alternatives at Quantum Advisors, said that the reason for increasing FPI registrations could be continued interest in Indian equity, bonds and real estate. “Besides, the end of the earlier FII/sub-accounts regime, which ended in September 2016, necessitated all such entries to register as FPI,” he added.
Further, market experts are of the view that several measures taken by SEBI have added to India’s attractiveness. Moreover, they believe that the regulator’s recent decisions, including allocating a separate limit of Rs 5,000 crore to FPIs for taking long position in Interest Rate Futures (IRFs) as well as doing away with the prior-approval requirement in case of change in local custodian, will help in boosting the sentiments.
In December, the board of Securities and Exchange Board of India (SEBI) had decided to relax entry norms for FPIs willing to invest in the Indian markets as part of its effort to easing direct registration for such investors and avoid participatory notes (P-notes) route. Also, it had decided to ease some rules, including expanding the eligible jurisdictions for registration by including countries with diplomatic tie-ups with India. Besides, the regulator had approved a proposal to rationalise “fit and proper” criteria for FPIs as well as simplify broad-based requirements for such investors.
In a major revamp, SEBI in 2014 had released norms that had clubbed different categories of foreign investors into a new class called FPIs. Under the regime, FPIs have been divided into three categories as per their risk profile and the KYC (know your client) requirements, while other registration procedures have been made simpler for them.