Norms issued for reclassifying FPI investment as FDI

THE Reserve Bank (RBI) and the Securities and Exchange Board (Sebi) have directed foreign portfolio investors (FPIs) to obtain necessary approvals from the government and concurrence from the investee companies in cases of acquisition of equity holdings beyond the prescribed limits.

- BENN KOCHUVEEDAN

The direction better aligns with the Fema rules, the regulators said in separate notifications on Monday and help lift current 10% cap on such investments, of course with prior government nod. The regulators have issued an operational framework for reclassification of overseas investments by FPIs to foreign direct investments (FDI), outlining the process to be followed in case of breach of the thresholds.