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Mauritius FPIs will continue
Why is it in the news?
- The SEBI has clarified that foreign portfolio investors (FPIs) from Mauritius will continue to be eligible for registration as foreign investors in India.
- However, the FPIs would be subject to increased monitoring.
More in the news
- Background:
(1) The regulatory clarification was necessitated after Mauritius was placed in the "grey list" of FATF.
(2) Grey list signifies ‘jurisdictions under increased monitoring’.
(3) There was an apprehension that the Mauritius-based FPIs will not be able to trade in the Indian capital market.
- Significance:
(1) Mauritius accounts for the second-largest chunk of foreign investments, as per data from the National Securities Depository Limited (NSDL).
(2) In January 2020, Mauritius-based FPIs had total assets under custody (AUC) of ₹4.37 lakh crore, second only to that of the U.S. with₹11.63 lakh crore.
- About FPIs:
(1) It is investment by non-residents in Indian securities including shares, government bonds, corporate bonds, convertible securities, infrastructure securities etc.
(2) The class of investors who make investment in these securities are known as Foreign Portfolio Investors.
(3) Any equity investment by non-residents which is less than or equal to 10% of capital in a company is portfolio investment. While above this the investment will be counted as Foreign Direct Investment (FDI).
(4) NRIs doesn’t comes under FPI.
(5) Foreign Portfolio Investors includes investment groups of Foreign Institutional Investors (FIIs), Qualified Foreign Investors (QFIs) and subaccounts etc.
Source
The Hindu