Foreign Portfolio Investor

Application of registration as a foreign portfolio investor shall be made to designated depository participant in the FORM and supported by fee $ 3,000 and $300 as per Category I and II respectively specified in Part A of the Second Schedule. Such fees to be remitted for every block of 3 years, till the validity of its registration.

In India, there are altogether 17 designated depository participant precisely Axis Bank Limited, BNP Paribas, Citibank N.A., DBS Bank India Limited, HDFC Bank Limited, ICICI Bank Limited, Kotak Mahindra Bank Limited, Stock Holding Corporation of India Limited, Yes Bank Limited and so on. Designated Depository Participant is also govern and license by Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019.

• Applicant is not a resident Indian, further applicant should not be non-resident Indian or an overseas citizen of India
• Applicant is a resident of the country whose securities market regulator ia a signatory to the International Organization of Securities Commission’s Multilateral Memorandum of Understanding or signatory to the bilateral Memorandum of Understanding with the Board.
• Applicant being Bank is a resident of country whose central bank is member of Bank for International Settlements
• Applicant or its underlying investors contributing 25% or more in corpus of applicant is not in the list of FATF or UNSC Criteria relaxation is especially given to an applicant incorporated or established in an International Financial Services Centre.

Category of Foreign Portfolio Investor

There are all together Two Category of Foreign Portfolio Investor

• Category I Foreign Portfolio Investor includes Pension Fund/University Fund, Appropriately regulated entities like insurance or reinsurance entities, banks, asset management companies, investment managers, investment advisors, portfolio managers, broker dealers and swap dealers. 
• Category II Foreign Portfolio Investor includes all the investors not eligible under Category I Foreign Portfolio Investor such as appropriately regulated funds not eligible as Category I, Endowments and Foundations, Charitable Organization, Corporate Bodies, Family Offices, Individual etc.

Foreign Portfolio Investor shall make investment only in the following securities:-

• Shares, debentures, and warrants issued by Body Corporate; listed or to be listed on a recognized stock exchange in India
• Units of schemes launched by Mutual Funds
• Units of scheme floated by a Collective Investment Scheme
• Derivatives traded on a recognized stock exchange
• Units of real estate investment trusts, infrastructure investment trusts and units of Category III Alternative Investment Funds are registered with the Board.
• Indian Depository Receipts
• Any debt securities or other instruments as permitted by the Reserve Bank of India for foreign portfolio investors to invest in from time to time

Minimum compliance requirements and action to be done by Foreign Portfolio Investor to register and operate investment business in India, are as follows:-

1. Engagement of Designated Depository Participant
2. Appointment of Custodian
3. Appointment of Designated Bank
4. Appointment of Compliance Officer
5. No Investment advice in publicly accessible media
6. Maintenance of proper books of accounts, records and documents
7. Preservation of books of accounts, record and documents

Statistically

As per the data published by Securities and Exchange Board of India (SEBI), 10,795 entity are registered as Foreign Portfolio Investor and/or Deemed Foreign Portfolio Investor as on 28th Feb, 2021.