The Securities and Exchange Board of India (Sebi) has come to the rescue of Indian intermediaries facing problems with regulators of foreign countries while marketing Indian financial products.
Sebi said it will take up the issue with its overseas counterparts so that additional registrations can be avoided. This would come as a huge relief to a number of Indian financial intermediaries (including mutual funds, wealth managers and private equity players) that have offshore offices to attract institutional and retail money into the domestic capital markets.
?With respect to the restrictions imposed by certain jurisdictions towards Indian intermediaries, SEBI would take up such issues proactively with the regulators of such jurisdictions, wherever appropriate, to exempt registered Indian intermediaries from any additional registration requirements for soliciting business from qualified residents in foreign jurisdictions,? stated a SEBI document released on Friday.
Incidentally, the Ministry of Finance (MoF) has already suggested that SEBI can take up such issues proactively with the regulators in other jurisdictions. The SEBI move comes close on the heels of a directive issued by UAE’s Securities & Commodities Authority (SCA) that directed all investment advisors to seek its approval before selling a product.
According to market players, if SEBI is able to get any kind of relaxation for Indian intermediaries, then it would go a long way in attracting a large amount of off-shore money into the Indian market. Meanwhile, SEBI would also initiate steps to enter into bilateral memorandum of understanding (MoUs) with regulators to attract more qualified foreign investors (QFIs).
According to MoF, there are currently 45 countries, which are eligible to invest under the QFI framework.
However, residents of seven countries namely Argentina, Korea, Turkey, Kuwait, Qatar, Ireland and Latvia are ineligible to invest though QFI route since SEBI does not have a bilateral MoU with these countries. ?Hence a need has been expressed to initiate the process of signing bilateral agreements with these seven countries,? stated the SEBI document.
