No fresh trading for FIIs holding back full info on structure: SEBI

No fresh trading for FIIs holding back full info on structure: SEBI

Market watchdog SEBI has said that FIIs which have not provided detailed information on their holding structures and account holders would not be allowed to undertake fresh trading in India from 1st Oct.

This comes as a follow up to an order in April by Sebi to foreign institutional investors to provide such details for the purpose of gathering additional information pertaining to their structure.

Sebi had given time till 30^th September for compliance with the decision.

"With effect from October 1, the FIIs and sub-accounts that have not complied with the ... requirements will not be permitted to take fresh positions in cash and derivatives markets while they can retain their current positions or sell off/ unwind," Sebi said on Wednesday.

In April, Sebi had sought detailed information from FIIs on their holding structures and account holders, a move apparently aimed at curbing routing of Indian money back into the country through overseas entities in order to avoid paying taxes.

While the existing FIIs are to provide the details of their constituents latest by 30^th September, all fresh FII applications seeking licence from 7^th April were required to attach the structure details.

Under the new rule, an FII will have to disclose its holding structure on whether it is a protected cell company (PCC), segregated portfolio company (SPC) or multi-class share vehicle (MCV) satisfying broad-based criteria set by the market watchdog.