The Securities and Exchange Board of India (Sebi) has announced a pivotal shift in its Foreign Portfolio Investors (FPI) Regulations, moving fee payments from US dollars to Indian Rupees (INR) for both FPIs and Foreign Venture Capital Investors (FVCIs). This strategic adjustment is designed to streamline compliance processes and mitigate operational delays, particularly those associated with manual accounting and invoicing.
These revised regulations, set to take effect in six months, also entail an increase in registration charges for Category-I FPIs and FVCIs. Furthermore, custodians will now face a transition from annual to monthly fee payments, introducing a more frequent payment cycle.
In a parallel move to enhance market liquidity management, Sebi has introduced new intraday borrowing norms for mutual funds. These changes allow mutual funds to borrow up to 20% of their net assets to meet unit-holder payout obligations, with a strict mandate for repayment by the close of the trading day. This measure aims to address settlement timing differences and other transactional needs, ensuring smoother operations for fund managers and investors alike.
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