New Delhi: To make it less difficult for the overseas fund managers eager to relocate to India, the Securities and alternate Board of India (Sebi) is considering permitting them to function as portfolio managers beneath an less difficult regulatory regime.
The pass assumes significance within the wake of the authorities already having introduced taxation incentives for the offshore fund managers willing to relocate to India.
a brand new phase in the earnings Tax Act provides that the fund control activity carried out thru an Eligible Fund supervisor (EFM) placed in India and appearing on behalf of an Eligible funding Fund (EIF) would not represent commercial enterprise connection in India of the sort of fund.
Following a notification via the tax department in this regard, marketplace regulator Sebi held meetings with diverse stakeholders to speak about the registration framework for EFMs, throughout which several impediments were talked about within the existing rules for funding advisers and portfolio managers.
finally, Sebi has decided to initiate a session system for modifications to its norms for portfolio managers whilst installing place a framework for permitting EFMs to act as portfolio managers to their EIFs.
an offer in this regard could be put up for approval of Sebi’s board subsequent week, a senior respectable stated.
most of the proposed measures, an existing Sebi-registered portfolio supervisor may also be allowed to behave as EFM with previous intimation from Sebi and challenge to certain situations.
Sebi also plans to install area a process for registration of an existing foreign-based fund manager desirous of moving to India, or as a clean applicant.
Such candidates can be granted registration as portfolio managers to behave as an EFM, provided they meet existing eligibility norms of being a body company, having net worth of Rs 2 crore, appointment of a essential officer and minimal employees with requisite credentials.
The EFMs could be required to segregate the price range and securities of the EIFs from that of different customers, provide information to Sebi on a half-yearly basis, ensure compliance to the Prevention of cash Laundering Act and different regulations.
but, EFMs would be exempted from numerous provisions of the PMS regulations with respect to the EIF, and would must follow the applicable regulatory and disclosure requirements of the jurisdiction of the EIF.