The Securities and Change Board of India (SEBI) has clarified that international portfolio buyers (FPIs) from Mauritius will proceed to be eligible for registration as international buyers in India however topic to elevated monitoring.
The regulatory clarification was necessitated after the island nation was positioned within the checklist of ‘jurisdictions under increased monitoring’ — generally known as the gray checklist — resulting in apprehensions that the Mauritius-based FPIs will be unable to commerce within the Indian capital market.
“… FPIs from Mauritius continue to be eligible for FPI registration with increased monitoring as per FATF norms,” said a launch by SEBI. On February 21, the Monetary Motion Job Power (FATF) positioned Mauritius within the gray checklist.
This assumes significance since Mauritius accounts for the second-largest chunk of international investments, as per information from the Nationwide Securities Depository Restricted (NSDL). In January 2020, Mauritius-based FPIs had complete property beneath custody (AUC) of ₹4.37 lakh crore, second solely to that of the U.S. with₹11.63 lakh crore.
In the meantime, the capital market regulator additional clarified that the FATF web site mentions that when a jurisdiction is positioned beneath elevated monitoring, it construes that the nation has dedicated to swiftly resolve the recognized strategic deficiencies inside agreed time frames and is topic to elevated monitoring.
“The FATF does not call for the application of enhanced due diligence to be applied to these jurisdictions, but encourages its members to take into account this information in their risk analysis,” said the SEBI launch.