SEBI Overhauls FVCI Registration Process for Streamlined Investments

SEBI has implemented new rules to streamline the registration process for Foreign Venture Capital Investors (FVCIs). The responsibility for granting registrations and processing post-registration references has been delegated to designated depository participants (DDPs). These rules aim to enhance efficiency and include new eligibility criteria for resident and non-resident Indians.

The capital markets watchdog, SEBI, has introduced new rules aimed at streamlining the registration framework for Foreign Venture Capital Investors (FVCIs). Under the updated regulations, the responsibility for granting registrations and handling post-registration processes will be transferred to designated depository participants (DDPs). This change aligns the process with existing provisions for Foreign Portfolio Investors (FPIs).

An applicant seeking FVCI registration must engage a DDP for obtaining a registration certificate, ensuring that the DDP and the custodian of the FVCI are the same entity. Previously, the Securities and Exchange Board of India (SEBI) handled the registration process directly. According to the new notification issued on September 6, no entity can engage in securities as an FVCI without a certificate granted by a DDP on behalf of SEBI.

Additionally, FVCIs must appoint a domestic custodian to oversee their investments in India, furnish periodic reports, and provide other necessary information to SEBI. The updated rules also allow Resident Indians, Non-Resident Indians, and Overseas Citizens of India to contribute to an FVCI applicant, with specific contribution limits. These changes will take effect from January 1, 2025, and aim to foster a more efficient and compliant investment environment.

(With inputs from agencies.)