Who is a Foreign Portfolio Investor and How to apply for Foreign Portfolio Investor Registration under SEBI?

The following are the benefits of becoming a registered FPI under SEBI:

• Access to huge market: Sometimes foreign markets can be less competitive than the domestic markets. Foreign Portfolio Investment provides exposure to a larger market. Foreign markets are less saturated & hence may offer higher returns alongside greater diversity.
• Flexibility and Liquidity: FPI provides the investors with high flexibility or liquidity, making it another FPI feature. Unlike direct investments in foreign assets, the FBI enables you to buy & sell Securities in the overseas market.
• Exchange Rate Benefits: By registering as a Foreign Portfolio Investor, there are also various forms of exchange rate benefits which can be enjoyed by this investor.
• International Credit: Foreign Portfolio Investments allow investors to access increased amounts of credit in foreign nations. This enables them to expand their credit base & secure their line of credit. They benefit from having a global credit score if the home country’s credit score is unfavorable. With this, they can capitalize on the opportunity & get high returns on equity investment.

Eligibility Criteria for Foreign Portfolio Investment Registration

To register as a Foreign Portfolio Investment, you must meet the following criteria:

• As per Income Tax Act, 1961, the applicant should not be a non-resident Indian;
• You must be eligible to invest in securities outside their home country;
• In case the applicant is a bank, it must be from a country whose Central Bank is a member of Bank for International Settlements;
• The applicant shouldn’t be a citizen of a country listed under the FATF public statement;
• Approval from the AOA or MOA or Agreement is required to invest in securities;
• A certificate stating the interest of the applicant in the development of the securities market is necessary.

The following are the list of required documents for Foreign Portfolio Investment Registration:

• Information regarding the applicant, his or her resident country & documents stating details of their profile;
• Proofs displaying eligibility as per the Board’s norms;
• MoA & AoA in case the applicant is a company;
• Other business details associated with the applicant;
• Any other required documents as asked by designated depository participants or SEBI.

The following is the procedure for Foreign Portfolio Investment Registration:

Step 1: Connect with us and then we will assign a dedicated expert with you to help you with this registration.

Step 2: After that we help you to fill out the application form on your behalf and to do so this process is carried out online under the User Registration Form.

Step 3: Authorization by DDP: In this step, Authorization for the Registration will be conducted by Foreign Portfolio Investment. Moreover, once it is started by the applicant, we will help them access the common application form through the NSDL FPI portal.

Step 4: Once we file the application, then you need to submit the required documents, which we would require for its submission to DDP. With that, we will get it signed by FPI before sending it.

Step 5: Verification of the Documents: Once the above steps are completed, the DDP will review your application. Once all requirements are met, we can proceed further, and we can help you in generating a certificate. Along with this, the PAN generation is important too. But with Whizseed, you are backed with good support. We have you covered throughout the whole process.

Recent FPI Examples in India

1. As per the current figures available publicly, Foreign Portfolio Investments have regained their confidence in the Indian economy after months of lockdowns, stock market disappointments, erosion of funds & job losses.
2. The equity segment received just above Rs. 6,000 crores while the rest went into debt segments.
3. Between 2^nd & 6^th November 2020, Foreign Portfolio Investments have pumped in around Rs. 8,381 crores in India’s markets, a clear indication that most investors believe India’s economic recovery will be faster than most western countries.
4. This influx of funds was a marked departure from Oct, 2020 when most FPI entities were net buyers. A weak US Dollar has also helped in restoring investor confidence.
5. If the present trend continues, India may soon become the preferred destination for portfolio.