SEBI Issues New Guidelines for Foreign Venture Capital Investors

Markets regulator SEBI has released new operational guidelines for Foreign Venture Capital Investors (FVCIs) and Designated Depository Participants (DDPs). The guidelines outline the procedures for registration, compliance, and investment activities. Existing FVCIs have until March 31, 2025, to engage a DDP; failing to do so will restrict them from making new investments.

Markets regulator SEBI issued new operational guidelines for Foreign Venture Capital Investors (FVCIs) and Designated Depository Participants (DDPs) on Thursday. These guidelines detail registration, compliance, and investment activities for FVCIs and outline the roles of DDPs.

The transition to the amended FVCI regime, set to take effect on January 1, 2025, is designed to ensure FVCIs and DDPs meet updated requirements. SEBI has set a deadline of March 31, 2025, for existing FVCIs to engage a DDP or face investment restrictions.

Proceeds from investor sales must adhere to KYC, AML, and CFT rules. DDPs are also tasked with conducting eligibility checks within six months of engagement. FVCIs failing to meet these criteria will be restricted from new investments but can hold or sell existing ones. SEBI has also stipulated that any FVCI or its investors appearing on the UN Security Council's sanctions list will face operational halts.

(With inputs from agencies.)