Arbitration and Conciliation Act - Amended Section 26 of Act is prospective in nature - SC (See 'Legal Desk') Inflame Appliances becomes 231th Company to get listed on BSE SME Platform RBI releases BOP data for October - December, 2017 Karnataka Money Lenders Act - Amendments made to Karnataka Money Lenders Act and Karnataka Pawn Brokers Act in year 1998 providing that security deposit furnished by money lenders & pawn shall not carry interest is not unconstitutional & invalid - SC (See 'Legal Desk') Over 1700 card & net bank frauds reported in 2017 (See 'TOG News' in Railways to provide more amenities in coaches (See 'TOG News' in Vice President emphasies on ethical corporate behavior (See 'Corpbrief') ADB lends USD 120 mn for improving rail infrastructure (See 'TOG News') Thermax Group bags orders of Rs. 503 crore Airtel offers Samsung Galaxy S9 range starting at Rs. 9900 SEBI inserts new regulation for shareholding norms in Mutual Funds Regulations (See 'DashBoard') SEBI amends Stock Brokers Regulations to have retrospective effect from June 13, 2017 (See 'DashBoard') Modi urges scientists to help inculcate scientific inclination in youth (See 'TOG News') Magenta & Pink lines halt dip in metro footfall (See 'TOG News' in Railways launch portal to showcase & promote good work (See 'TOG News' in SEBI Act - Every listed company must assign high priority to investor grievances which Noticee fails to do, hence liable for monetary Penalty - SEBI (See 'Legal Desk') Companies Act- Provision u/s 164(2) and 167 of Act are not illegal, unconstitutional or ultra vires just because provisions may operate harshly against Directors of defaulting company - HC (See 'Legal Desk') Finance Bill 2018 As Passed By Lok Sabha (See '') Revision of limits of underlying exposure for currency derivatives contracts (See 'Dashboard') Agency commission payable to banks for operating Special Deposit Scheme (SDS) (See 'Dashboard') Submission of returns by the Government-owned Non-Banking Financial Companies (See 'Dashboard') Capital First is amalgamating with IDFC Bank Karur Vysya Bank declares that no credit exposure to Gitanjali Gems 'Banking Regulatory Powers Should Be Ownership Neutral' says Urjit R. Patel in inaugural lecture at Gujarat National Law University Ramco to launch Workforce Innovation Center in Australia Zensar and Microsoft extend Strategic Partnership in South Africa JSW Steel announces new TV campaign to support its flight against counterfeit steel Railways to install Escalators at all A1, A & C category stations (See 'TOG News' in Indian Tea Exports cross 240 mn kg mark (See 'TOG News' in Clarification to Circular pertaining to Investor Protection Fund (IPF) and Investor Service Fund (ISF) (See 'Dashboard') Clarification to Circular pertaining to Investor Grievance Redressal System and Arbitration Mechanism (See 'Dashboard') Cabinet apprised of India-Lanka MoU on IT and Electronics (See 'Corpbrief') IGST 'Little Boat' may not sail in Nilekani's proposed GSTR model (See 'THE COB(WEB)' in TIOL) Cabinet approves India-Iran MoU on agriculture and allied sectors (See 'TOG News' in Arbitration and Conciliation Act - If clause in an agreement is capable of two interpretations and view taken by arbitrator is possible one, then High Court cannot interfere with Award and substitute its view - HC (See 'Legal Desk') Trade Marks Act Even if defendant is prior user of mark VOBIT, it is not acceptable to add prefix TRI to make same as TRI-VOBIT, which is phonetically and structurally similar to plaintiff's mark TRIVOLIB - HC (See 'Legal Desk') Vanishing Companies case - MCA sets up Monitoring Panel (See 'Corpbrief') NTPC raises USD 400 mn from international markets (See 'Corpbrief') Wipro joins hands with Trintech to provide solutions to Enterprise Finance Functions RBI directives to apply to Sanmitra Sahakari Bank from March 15, 2018 to July 14, 2018 Companies Act - It is fit case for granting interim relief if RoC has not taken any steps to redress petitioner's complaints against his disqualification as Director and deactivation of his DIN & DSC - HC (See 'Legal Desk') Govt pushes through Budget despite rebellious Opposition (See 'TOG News' in BHEL commissions 600 MW Thermal power plant in Andhra Pradesh Increased online activities raise risk of cyber crime, says Rajnath Singh (See 'TOG News' in Lok Sabha hurriedly passes Finance Bill 2018; House adjourned till tomorrow Payment of differential Customs duty ITC of IGST component? (See 'TOG Insight' in L&T Hydrocarbon Engineering wins orders of Rs 1600 Cr NCLT puts Bhushan Power & Steel's Insolvency Resolution on hold 1630 M&A cases pending before NCLT (See 'Corpbrief') Shareholders nod not required for Resolution professional now (See 'Corpbrief') Companies Act - Section 529A when OL has no objection in delivering possession of secured assets to first charge-holder then objections raised by petitioner, being ex-management of company, is not justified - HC (See 'Legal Desk') Companies Act - Winding up petition on account of Commercial insolvency is still maintainable if petitioner has already received money in lieu of its claim against Company from insurance company - HC (See 'LegaL Desk') Arbitration and Conciliation Act, 1996 - When creditor establishes prima facie case that there is likelihood of its success in claim and other party is likely to defeat claim by transferring assets, such claim is entitled to protection under provisions of CPC: HC (See 'Legal Desk') Clarifications in respect of investment by certain Category II FPIs (See 'Dashboard')



CIR/IMD/FPIC/47/2018, March 13, 2018

1. All Foreign Portfolio Investors ("FPIs") through their Designated Depository Participants ("DDPs")/ Custodian of Securities.
2. All Recognized Stock Exchanges
3. The Depositories (NSDL and CDSL)

Subject: Clarifications in respect of investment by certain Category II FPIs

I. This is in reference to SEBI circular No. CIR/IMD/FPIC/26/2018 dated February 15, 2018 regarding “Easing of access norms for investment by FPIs”.

II. In view of queries from stakeholders, the following clarifications are made in respect of investment by certain category II FPIs:-

(1) The collective investment vehicle of private banks/ merchant banks investing on behalf of clients need to ensure the following:-

a) The client/ investor should have fulfilled know your client norms. The beneficial owners (BO) of client/ investor of bank should be identified in accordance with Rule 9 of Prevention of Money Laundering (Maintenance of Records) Rules, 2005.

b) The client/ investor or their BO should not be Resident Indian/ NRI/ Overseas Citizen of India.

c) The client/ investor is not resident in a country identified in the public statement of Financial Action Task Force as:-

i. a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply; or

ii. a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies;

d) The client/ investor should not have opaque structure(s), as defined under Explanation 1 of Regulation 32(1)(f) of SEBI (Foreign Portfolio Investors) Regulations, 2014 or Bearer share structure.

e) The collective investment vehicle of the Bank (other than for ODIs) should be broad based (more than 20 investors and no investor having more than 49% stake) and there should be common portfolio for all clients/ investors.

f) The conditions already specified at point (g) of SEBI circular dated February 15, 2018 shall continue to be applicable.

(2) Presently, appropriately regulated broad based insurance/ reinsurance companies are investing proprietary funds and for unit linked/ investment products. In this regard, it is clarified that investment in India by insurance/ reinsurance companies must be maintained as an undivided common portfolio. Segregated portfolio or investor/ policy-holder level investment structure shall not be permitted.

(3) In respect of other appropriately regulated persons permitted as Cat. II FPIs viz. asset management companies, investment managers/ advisers, Portfolio managers, Broker-dealer and Swap-dealer. It is clarified that:-

(a) They are permitted to invest their proprietary funds,

(b) These appropriately regulated persons by taking separate registration can also invest with client funds as an ODI Issuing FPI or after fulfiling the condition of being broad based and having a common portfolio. However, asset management companies having thematic portfolios can also have segregated structure if each theme is broad based.

(4) All other investment restrictions and due diligence requirements as applicable to FPIs shall continue to be applicable on entities referred at (1) to (3) above.

III. This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

IV. A copy of this circular is available at the links “Legal Framework "Circulars" and "Info for - F.P.I” on our website The DDPs/Custodians are requested to bring the contents of this circular to the notice of their FPI clients.

Achal Singh
Deputy General Manager