Hindusthan Samachar
Banner 2 बुधवार, मार्च 27, 2019 | समय 01:15 Hrs(IST) Sonali Sonali Sonali Singh Bisht

FPI fund managers oppose central database of beneficial owners

By HindusthanSamachar | Publish Date: Mar 11 2019 5:04PM
FPI fund managers oppose central database of beneficial owners
Mumbai, Mar.11 (HS): Foreign Portfolio Managers of India (FPI) have opposed the SEBI proposal to create a central database containing personal information of all actual beneficial owners of foreign funds. Fund managers have said that if that type of database is owned by a third agency in India then it would be considered a violation of the law in their own country. Meanwhile, the market regulator Sebi (Securities and Exchange Board of India) has directed all institutional investors to immediately complete the KYC process and tighten its database. This matter is connected to the specification of the Beneficial Owners in KYC. Earlier, fund managers were technically saving the funds in their own name of those accounts which had no nominees but now Sebi has made it mandatory to submit nominees documents ot registrar so that there minght not be any confusion on anyone''s part.It is noteworthy that SEBI had issued a circular in last year on April 10, 2018, and for any fund, Foreign Institutional Investors (FPI-Foreign Portfolio Investors) had been instructed to identify the ownership of the fund, not only on ownership basis, but on the basis of its control. There have been many cases in which there is no obvious beneficial owners on the basis of economic ownership. In this case, the fund manager and other senior management officers of the funds are automatically treated as beneficial owners.Similarly, foreign mutual funds do not have even more beneficial owners. Money is collected from thousands of investors holding fewer units. The main investment officer or other senior management officers are considered as beneficiary owners in the investment or fund of this process. This has been opposed by FPI and non-resident Indian investors after SEBI''s instruction. After institutional investors'' opposition, SEBI has relaxed this regulation. Sebi has limited the rights of ownership owners to the KYC by making a new definition.Sebi said that under the KYC, the FPI will be compulsorily depositing its beneficiary owners'' document with the custodian bank. After the document is submitted, the concerned bank will give this information to the registrar. In addition to this, SEBI has also directed registrars to create a central database of these documents, which other market intermediaries can also view as required. There is a provision for approval from the FPI in the near future to see this database. However, the FPI has suggested that after obtaining KYC information, it will issue an affidavit to SEBI if it will need the same. But SEBI rejected this suggestion. Sebi felt that the fund will hide the information of the beneficial owners in the end.Hindusthan Samachar/Bharati/Pramod \
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