The Securities and Exchange Board of India (SEBI) on May 18, 2023, issued a Consultation Paper on streamlining the regulatory framework for the registration of Foreign Venture Capital Investors (FVCIs)
The objective of this Consultation Paper is to seek comments and inputs from stakeholders and members of the public on streamlining the regulatory framework for the registration of Foreign Venture Capital Investors.
The following has been proposed namely: -
• It has proposed that the process of granting registration to FVCIs and processing other post-registration references may be delegated to DDPs, in line with provisions prescribed for FPIs.
• It has proposed that an applicant seeking registration as an FVCI shall engage a DDP to avail its services for obtaining a certificate of registration as an FVCI and at all times the DDP and the custodian of the FVCI shall be the same entity.
• The eligibility criteria for registration as FVCI has been proposed to be revised as per the conditions attached
• The Form A provided under the First Schedule of FVCI Regulations, may be revised to collect information in line with that sought in CAF for the purpose of registration of FPIs.
• The requirement of PAN and Demat account shall be prerequisites for the purpose of the registration as FVCIs.
• To mandate that FVCIs shall hold the instruments/securities of their investments only in dematerialized form. The aforesaid requirement shall not be applicable in case of investment in such type of instruments/securities for which dematerialization is not available.
• The existing investments of FVCIs in investee companies where the FVCI or FVCIs together have controlling interest, investments in such investee companies shall be held in the dematerialized form further A time period of 6 months may be provided for dematerialization of investment made by FVCI in such investee companies.
• FVCIs who wish to continue with their registration for the subsequent block of five years, should pay renewal fees of USD 2500/-to their DDPs and inform change in information, if any, as submitted earlier.
• In case an FVCI fails to pay the renewal fee in the manner specified then a late fee equivalent to two percent of the registration fee shall be charged for each day of delay in payment of the renewal fee, subject to a maximum of two times the registration fee. Post which, the certificate of registration of FVCI shall be liable to be suspended/canceled.
• It further states that till the renewal fee is paid, FVCIs shall not buy or sell any investment. The custodian of the FVCI shall monitor compliance of FVCI with the said provision
Public comments are invited for the proposals stated above. The comments/suggestions may be provided in an Excel file as per the format attached
Comments may be sent to the following, latest by May 31, 2023, in any of the following manner namely: -
(i) Preferably by email to [email protected], with a copy to Ms. Padma Bharathi S, Manager ([email protected])
(ii) By post to: Shri Sanjay Singh Bhati, Deputy General Manager, Alternative Investment Fund and Foreign Portfolio Investors Department, Securities and Exchange Board of India, SEBI Bhavan, C4-A, G-Block, Bandra Kurla Complex, Bandra (East), Mumbai -400051
