Overseas investors from Mauritius eligible for FPI registration with enhanced monitoring, says SEBI

Following the FATF notice, some fund managers knocked on SEBI's door overnight, raising concerns over validity of FPI registration done through the tax haven.

Press Trust of India February 25, 2020 17:11:22 IST
Overseas investors from Mauritius eligible for FPI registration with enhanced monitoring, says SEBI
  • The announcement comes after the tax haven was put on the grey list of Financial Action Task Force

  • The island nation is the second-largest source after the United States from which foreign portfolio investments come into the country

  • For several years, there have been apprehensions about Mauritius being a money-laundering route for FPIs due to its limited regulatory oversight

New Delhi: Market regulator Sebi on Tuesday said foreign investors from Mauritius will continue to be eligible for FPI registration with increased monitoring as per international norms.

The announcement comes after the tax haven was put on the "grey list" of Financial Action Task Force (FATF) — an inter-governmental policy-making body that sets anti-money laundering standards.

A significant percentage of foreign portfolio investors (FPIs) investing in the Indian market is registered in Mauritius.

Overseas investors from Mauritius eligible for FPI registration with enhanced monitoring says SEBI

Representational image. Reuters

The island nation is the second-largest source after the United States from which foreign portfolio investments come into the country.

As per January NSDL data, assets under custody of US FPIs are worth Rs 11,62,579 crore and those from Mauritius stood at Rs 4,36,745 crore.

Following the FATF notice, some fund managers knocked on SEBI's door overnight, raising concerns over validity of FPI registration done through the tax haven.

The regulator on Tuesday said, "Foreign investors from Mauritius will continue to be eligible for FPI registration with increased monitoring as per FATF norms".

For several years, there have been apprehensions about Mauritius being a money-laundering route for FPIs due to its limited regulatory oversight. But, the Indian Ocean island nation has been taking several steps in recent years to address the concerns.

Jurisdictions under the "grey list" face increased monitoring. They work closely with FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.

Currently, there are 18 jurisdictions identified as having "strategic deficiencies", including Mauritius and Pakistan, as per the FATF.

Equity benchmark BSE Sensex was trading 43.29 points higher at 40,406.52, and the broader NSE Nifty was up 10.10 points at 11,839.50.

On a net basis, FPIs sold equities worth Rs 1,160.90 crore on Monday, data available with stock exchanges showed.

Updated Date:

also read

Money laundering case: Shiv Sena MP Sanjay Raut appears before ED, leaves after more than ten hours
Politics

Money laundering case: Shiv Sena MP Sanjay Raut appears before ED, leaves after more than ten hours

The ED had summoned the Rajya Sabha member for questioning in the money laundering probe linked to the re-development of a Mumbai 'chawl' (tenement) and related financial transactions involving his wife and friends

Money laundering case: ED gives Shiv Sena's Sanjay Raut more time, asks him to appear with important documents on 1 July
India

Money laundering case: ED gives Shiv Sena's Sanjay Raut more time, asks him to appear with important documents on 1 July

The first summon was issued to the Rajya Sabha MP Sanjay Raut for Tuesday but he sought more time citing official commitments and a meeting he was supposed to attend at Alibaug

Shiv Sena's Sanjay Raut calls ED summon 'conspiracy'; says, 'Even if you behead me, I won't take the Guwahati route'
Politics

Shiv Sena's Sanjay Raut calls ED summon 'conspiracy'; says, 'Even if you behead me, I won't take the Guwahati route'

Sanjay Raut has been summoned by the federal probe agency for questioning in a money laundering case linked to the re-development of a Mumbai 'chawl' and other related financial transactions involving his wife and friends