The Securities and Exchange Board of India (SEBI) has an amendment to the SEBI (Foreign Venture Capital Investors) Regulations, 2000. Under the amendment, every foreign venture capital investor (FVCI) is required to obtain a certificate from a designated depository participant, which is acting on behalf of the SEBI, before dealing in securities in India.
The certificate will be granted after an FVCI establishes that:
- They were incorporated or established outside of India or in the International Financial Services Centre;
- Their country is a signatory to the International Organisation of Securities Commission’s multilateral memorandum of understanding or has entered into a MoU with the SEBI;
- Neither the FVCI nor any of its beneficiaries are on the sanction list under the applicable anti-money laundering laws; and
- It meets the requirements in schedule II of the SEBI (Intermediaries) Regulations, 2008.
Applications are usually decided within 30 days. On the granting of a certificate, a domestic custodian will be appointed for the custody of securities. The FVCI must also operate a special non-resident rupee or foreign currency bank account with a designated bank.
The amended regulations come into effect from 1 January 2025.
