Now the dollar will not work! New guidelines for foreign investors, know why SEBI created panic among investors?

Business Desk- The Securities and Exchange Board of India (SEBI) has made a major change for foreign investors (Foreign Portfolio Investors-FPI) and Foreign Venture Capital Investors (FVCI) investing in the Indian stock market. Now these investors will have to deposit the registration fee not in US dollars (USD) but in Indian Rupees (INR). For this, SEBI has amended the rules. This new rule will come into effect six months after the issuance of the notification.

Now fees will be in Indian Rupees, not dollars

According to the notification issued by SEBI on July 3, the registration fee for Category-I FPI and FVCI has now been fixed at Rs 2.30 lakh instead of US $ 2,500. That means foreign investors will no longer need to pay in dollars. This will make the payment process easier and the impact of fluctuations in foreign currency exchange rates will also be reduced.

Big change in common application form also

SEBI has not only changed the method of fee payment, but has also amended the common application form used for FPI registration. Now while applying, applicants will have to compulsorily mention their date of birth or date of incorporation of the company. According to SEBI, this change will make the process of issuing Permanent Account Number (PAN) easier and faster.

Responsibility increased on DDP also

Under the new rules, the responsibilities of Designated Depository Participants (DDPs) have also been increased. Now DDP will have to deposit the registration fees collected from foreign investors in Indian rupees with SEBI. SEBI has clarified that after the registration certificate is issued to an FPI, the concerned DDP will have to deposit this fee in the SEBI account within five working days.

Not just fees, complete information will also have to be given

Under the new rules, mere deposit of fees will not be sufficient. Along with the fees, DDP will also have to provide necessary information in the format prescribed by SEBI. SEBI has said that this format may be changed from time to time and the DDP will have to submit all the details accordingly. This will make the registration process more transparent, systematic and monitorable.

In which cases will the new rule apply?

SEBI has clarified that this system will be applicable only on initial registration. That is, when a foreign portfolio investor registers for investment in India for the first time, only then the DDP will have to send the fees collected from him and the complete information related to it to SEBI within the stipulated time.

What will be the effect of this change?

Experts believe that this decision will make the payment process easier for foreign investors. With the end of the obligation to pay in dollars, the uncertainty related to the exchange rate will also reduce. It will also help SEBI to better monitor the registration process. The new rules aim to make the system more transparent, simple and digital for foreign investors.