Budget proposes simple KYC norms for FPIs

Budget proposes simple KYC norms for FPIs
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Finance Minister Nirmala Sitharaman on Friday proposed various measures such as easing of KYC norms for foreign portfolio investors and allowing the listing of social enterprises and voluntary organisations to enhance participation in the capital markets.

New Delhi: Finance Minister Nirmala Sitharaman on Friday proposed various measures such as easing of KYC norms for foreign portfolio investors and allowing the listing of social enterprises and voluntary organisations to enhance participation in the capital markets.

Presenting her maiden budget, Sitharaman said steps need to be taken to bring capital markets closer to people and proposed raising the threshold for minimum public shareholding from 25 per cent to 35 per cent.

She said a number of steps would be taken in consultation with the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) to deepen the corporate bond market.

Announcing measures related to capital markets, Sitharaman said investments by FIIs and FPIs in debt securities would be allowed to be transferred and sold to domestic investors in a timely manner and also proposed FPI investment in debt securities issued by NBFCs.

"It is proposed to permit investments made by FIIs/FPIs in debt securities issued by Infrastructure Debt Fund – Non-Bank Finance Companies (IDF-NBFCs) to be transferred/sold to any domestic investor within the specified lock-in period," she said.

She said a harmonised and hassle-free investment environment needs to be provided to foreign portfolio investors and KYC norms for them would be rationalised and simplified to be made more investment-friendly.

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