Foreign investors await market regulator's clearance for registration. Over 270 applications from foreign institutional investors (FIIs) are awaiting the Securities and Exchange Board of India’s (Sebi) clearance as the debate on the speedy clearance of registrations by the capital market regulator rages on. In fact, during the last one year, the Sebi has cleared a total of 141 applications, an average of about 12 registrations a month. Presently, the number of sub-accounts are 3,445, according to Sebi data. The number assumes significance in the wake of the Sebi proposal to clamp down on foreign inflows through the participatory note (PN) route. Sebi sources said it was streamlining the registration process for both FIIs and their sub-accounts in a move to encourage direct inflows from foreign investors into the country’s equity markets. In a discussion paper issued late on Tuesday, the Sebi proposed policy changes on the offshore derivative instruments (ODIs), popularly known as PNs, and asked feedback from market participants. The Sebi board, which is meeting next Thursday, is expected to announce the new regulations.   more »

India has pledged to open the “front door” wider to hedge funds in an apparent bid to bolster foreign investor confidence after a stock market plunge triggered by a proposed crackdown on investment in the country through offshore derivatives. Hedge funds will be given easier direct access to the Indian stock market after the proposed curbs that have raised fears of a rush of selling by foreign investors. M Damodaran, the chairman of the Securities and Exchange Board of India, said the regulator had already registered some hedge funds as investors qualified to invest in the country. He said Sebi was reviewing regulations to see if there were more types of funds that could meet the criteria for entry. “We are looking at the content to see if we can bring in a few more people that might not presently qualify,” Mr Damodaran said.   more »

The last day for feedback on the Securities and Exchange Board of India's (SEBI) proposal on participatory note ban is October 20, Saturday. But local law firms are already flooded with enquiries regarding registration from foreign institutional investors (FIIs). Siddharth Shah, head of funds practice at Mumbai-based law firm Nishith Desai Associates, says he expects a significant surge in the numbers of registrations based on the level of enquiry alone. "Queries have not only been pouring in from the largest source of FII inflows - the US - but even from Europe and Middle East," Shah said. Shah has been receiving 15-20 queries during the past two days. "That's the level we normally receive in a month," he said. Mumbai-based investment bank and business consultancy Atherstone Group has proactively appointed its legal advisor, Sterling Law Partners, to set up helpdesks across global financial centres to assist FIIs. Atherstone will also begin seminars at Singapore, Hong Kong, London and New York on the registration process soon.   more »