India may soon have one investment avenue for non-resident Indians (NRIs). A Securities and Exchange Board of India panel is set to suggest that the NRI and portfolio investment scheme (PIS) routes be merged with that of foreign portfolio investors (FPIs). The move is aimed at having a uniform regime for all foreign portfolio investors.
“The merger will help Sebi regulate NRI investments in India as the regime is currently unregulated. There is no reporting and monitoring for NRIs, but this proposal will now bring them under Sebi,” said a government employee. “For investors, it will be less disruptive as they just have to migrate to FPI. Also, all the current limitations on NRI investments under the FPI regulation will go away.”
Sebi set up a high-powered panel under the chairmanship of former Reserve Bank of India deputy governor HR Khan, assisted by custodians, lawyers and chartered accountants, to review all FPI regulations. The committee submitted its interim report to the regulator in 10 October 2018. It’s expected to submit the final report by next month to Sebi, proposing sweeping changes to FPI regulations, sources said.
Sebi eased norms for NRIs last month based on the Khan panel’s recommendations. The committee had suggested that NRIs, OCIs and resident Indians should be allowed to hold non-controlling stakes in FPIs and there should be no restriction on them managing offshore funds. NRIs have been allowed to invest as FPIs if a single holding is under 25% and a group holding is under 50% in a fund.