SEBI committee to standardise rules for foreign investors

Capital market regulator SEBI today said it had formed a committee for standardisation of rules regarding foreign investments made under various routes and by different kinds of investors.

Addressing industry lobby Confederation of Indian Industry's fourth capital market summit, SEBI chairman UK Sinha said the regulator had formed a panel headed by ex-cabinet secretary, KM Chandrasekhar to examine the issues raised by foreign investors over know-your-customer (KYC) and tax norms.

At present different categories of foreign investors have different regulations, with investors including foreign institutional investors (FIIs), qualified foreign investors (QFIs), foreign venture capital investors (FVCIs), non-resident Indians (NRIs), and sub-accounts. Investments by FIIs in Indian equities have touched at least $20 billion in this year.

''QFI flows have not begun in any meaningful manner. FIIs feel KYC norms are too stringent. Most of the issues have been resolved except for the issue of requirement of PAN (permanent account number for income tax) card for QFI investments. The government has to tackle that. But in consultation with the government, Sebi has set up a committee to bring all foreign investments under a single route,'' said Sinha.

Competitors were bringing down initial public offers, Sinha said. "A large number of complaints are not from investors, stake holders or even activists. A significant proportion is from competitors," he said.

He added he increasingly came across corporate India setting up offices to just track competition. "If someone does something wrong, there are systems in place to deal with that," said Sinha.