SEBI flexes registration norms to check fund outflow

With new norms in place, market regulator hopes to restore investor confidence, attract more foreign investments

GN Bureau | September 13, 2013



Hoping to calm the frayed nerves of foreign investors, markets watchdog Securities and Exchange Board of India (Sebi) has decided to relax registration norms and do away with exhaustive paperwork. This move, however, will be applicable only for low-risk foreign investors.

Further, in order to be able to differentiate between high-risk and low-risk foreign investors making portfolio investments in India, the regulator has created three categories, it said in a circular issued Thursday night.

The lowest risk investors have been classified under category-1. These include foreign governments, foreign central banks, government agencies, sovereign wealth funds and international/multilateral organisations. It is for this group of investors that the regulator has relaxed certain know your customer (KYC) norms; they need not submit documents for financial performance and board resolutions.

Medium-risk investors that have been grouped in category II include well-regulated entities like mutual funds, insurers, investment trusts, banks, university funds and pension funds. Certain norms have been relaxed for this group as well. Finally, category III consists of high-risk investors including corporate bodies, individuals, endowments and charitable societies for who will have to comply with stricter registration norms.

In the last few months, a sudden outflow of foreign capital owing to uncertainty in the Indian markets has left the government and its institutions scrambling for measures. With the new norms in place, the regulator hopes to restore investor confidence and attract foreign funds.

Comments

 

Other News

How Rafi, Raj Kapoor helped pave the way for a great uranium deal

There`s a certain moment in diplomacy that`s too personal to be captured in a communiqué, too small to make the front page, but more revealing than the front page. This week, prime minister Narendra Modi reached Tashkent and, amid the pomp of state visits, managed to evoke the old Bollywood tunes

Distinguishing Fish 1 and Fish 2: The pragmatism behind India’s WTO ratification

 India became the 123rd WTO member to ratify the multilateral Agreement on Fisheries subsidies (AoFS) when it deposited the Instrument of Acceptance for Phase 1 on July 20, 2026. The ratification is restricted to disciplining Illegal, Unreported and Unregulated fishing (IUU), protection for overfished

The 7% growth problem: Why the next 7% will be harder

India has become accustomed to hearing the 7% growth number. It is now less a milestone than an expectation. Yet the paradox is becoming clearer: maintaining 7% growth may be considerably harder than achieving it once. India’s real GDP grew 7.7% in FY2025–26, following growth of 6.5% in FY202

The Constitution cannot be altered: Justice Abhay Oka

Justice Abhay Oka, who retired from the Supreme Court in May 2025, has said that the Constitution of India cannot be altered. Explaining the landmark Kesavananda Bharati judgment (1973) on the basic structure of the Constitution, he said, “This is one judgment that has saved democracy in India.&rdq

How the flora and fauna evolved in the Indian subcontinent

Mammals of India  By A.J.T. Johnsingh and P.O. Nameer HarperCollins India in association with Bombay Natural History Society  

India`s renewable race is moving beyond megawatts

When Shell bought Sprng Energy in 2022, India`s renewable energy market appeared to offer precisely what global energy majors were seeking: scale, growth and a place in one of the world`s largest energy transitions. Four years later, Shell is selling the same business to Aditya Birla Group for an enterpris

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter