INSUBCONTINENT EXCLUSIVE:
Markets regulator Sebi today said two or more foreign government and its related entities from the same jurisdiction will be considered a
single FPI for the investment cap of 10 per cent in a listed Indian company.The move comes as various stakeholders have been seeking
guidance on clubbing of investment limits to be applied to foreign government and its related entities.In case the same set of beneficial
owner invest through multiple entities, such entities will be treated as part of same investor group and their investment limits will be
clubbed as single foreign portfolio investor (FPI), Sebi said in detailed set of frequently asked questions (FAQs).Accordingly, the combined
holding of all foreign government and its related entities from the same jurisdiction will be below 10 per cent of the total paid up capital
of the company."However, in cases where government of India enters into agreements or treaties with other sovereign governments and where
such agreements or treaties specifically recognise certain entities to be distinct and separate, Sebi, may, during the validity of such
agreements or treaties, recognise them as such, subject to conditions as may be specified by it," Sebi noted.Besides, World Bank Group -
IBRD, IDA, MIGA and IFC - have been exempted from clubbing of the investment limits for the purpose of application of 10 per cent limit for
FPI investments in a single firm.According to Sebi, FPIs investing in breach of the prescribed limit need to divest their holdings within
five trading days from the date of settlement of the trades causing the breach
Alternatively, the investment by such investors will be considered as investment under FDI.However, FPIs need to immediately inform of such
option to Sebi and Reserve bank of India (RBI), since they cannot hold equity investments in a particular company under FPI and Foreign
Direct Investment (FDI) route, simultaneously.
