Security Exchange Board of India issues guidelines for off-mkt transfer of securities by FPIs to IFSC

Security Exchange Board of India

Markets regulator Security Exchange Board of India (Sebi ) on Tuesday published a new set of guidelines for relocation of foreign funds to the International Financial Services Centre (IFSC).

 

For relocation, a Foreign Portfolio Investor (FPI) or its wholly-owned special purpose vehicle may approach its Designated Depository Participants (DDP) for approval of a “one-time ‘off-market transfer of its securities to the ‘resultant fund’,” as per a circular of the SEBI.

Sebi noted that tax incentives are provided for relocating foreign funds to IFSC under the Finance Act, 2021, in order to make the IFSC in GIFT City, Gujarat, a global financial hub.

Sebi noted that tax incentives are provided for relocating foreign funds to IFSC under the Finance Act, 2021, in order to make the IFSC in GIFT City, Gujarat, a global financial hub.

DDPs after appropriate due diligence may accord its approval for a one-time off-market transfer of securities for such relocation,  Sebi said.

Relocation request will imply that the FPI has deemed to have applied for the surrender of its registration. “The ‘off-market transfer shall be allowed without prejudice to any provisions of tax laws and FEMA,” the Security Exchange Board of India said. The country’s first IFSC in the country has been set up at the Gujarat International Finance Tec-City (GIFT) in Gandhinagar.