Brief Overview:

Increased participation of upto 100% is permitted for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Resident Indians (RIs) to the corpus of GIFT IFSC based FPIs.

This was introduced by way of a circular by IFSCA pursuant to discussions with SEBI. SEBI has approved the same in its meeting that took place last week.

Technical Details:

Fund Management Entities (FMEs) are required to register its schemes / funds as FPI to invest in listed Indian securities.

There are 2 routes under which NRI/OCI/RI investors may contribute up to 100% in the corpus of IFSC based FPIs

Route 1:

Where FPIs will be submitting copies of PAN and other documents of all the NRI/OCI/RIs + their economic interests in the FPI, to the designated depository participant.

Route 2:

Without FPI being required to submit PAN and other documents. It is further specified that FMEs intending to invest in Indian securities under this Route by setting up Retail Schemes, Restricted Schemes and Exchange Traded Funds (ETFs) in an IFSC, will be required to comply with additional conditions as regards eligibility, investment thresholds, independence of the FME etc.

JC takeaway:

This exclusive clearance for GIFT FPIs will further boost the participation in the market and bolster existing FPIs to explore the option of re-location/re-domicile of their investment vehicles.

For further details, please see:  

International Financial Services Centres Authority (ifsca.gov.in)

For any queries/clarifications, please feel free to ping us and we will be happy to chat: