In a move to enhance ease of doing business, the government has introduced a single application form for foreign investors to enter into the domestic capital market. The common application form was prepared jointly by Sebi, Reserve Bank of India (RBI) and Central Board of Direct Taxes (CBDT).
A common application form for FPIs would be devised with a view to improve operational flexibility and ease of access to Indian capital markets, Finance Minister Arun Jaitley had said in his 2017-18 Budget speech.
The central government has now notified the Common Application Form for the purpose of registration, opening of bank and DEMAT accounts and application for permanent account number by FPIs in India.
The long-pending single combined application form for registration of FPIs with the Securities and Exchange Board of India, allotment of PAN and know your customer (KYC) for opening bank and DEMAT account is expected to reduce time and cost for the foreign investors.
According to the form, the individual custodian/designated depository participants (DDPs) can seek additional information based on their independent evaluation and risk classification of the FPI applicants for KYC purposes.
This will be done based on multiple parameters such as home jurisdiction, type of entity, nature of business.
Earlier, foreign portfolio investors (FPIs) had to file a separate form to register themselves with the market regulator Sebi.
Besides, they had to approach bank for opening bank account, income tax department for PAN (Permanent Account Number) and market intermediaries for DEMAT account.
Foreign portfolio investors (FPIs) pumped in a net sum of Rs 2,048 crore into equities during August 1-24, according to the latest depository data.
FPIs have pulled out more than Rs 2,100 crore from equities overall so far in the present year, while they withdrew nearly Rs 37,000 crore from the debt markets.