Fund managers flock to Sebi for FII status

Fund managers flock to Sebi for FII status
ENS ECONOMIC BUREAU

MUMBAI, JAN 16: The latest fad among Indian investment firms is to seek foreign institutional investor (FII) status from the Securities and Exchange Board of India (Sebi). A number of Indian companies have applied to the Sebi for FII status.

The SEBI has granted deemed foreign institutional investor status to four Indian fund managers, including Reliance Capital Asset Management and Anand Rathi Securities. Munoth Financial Services and First Global Stock Broking Pvt Ltd were the other two firms, SEBI said in a release here today. Kotak Mahindra (UK) Ltd, a 100 per cent subsidiary of Kotak Mahindra Capital Company, a London-based firm, regulated by the Securities and Futures Authority in the UK, has recently got an FII registration.

These entities are permitted to manage funds raised abroad and cannot make proprietary investments through this route, it said. Applications of UTI Investment Advisory Services Ltd and Dundee Investment Research were being processed, SEBI added.

Senior Sebi officials confirmed that about half-a-dozen domestic companies have now petitioned the regulator for getting themselves registered as FIIs.UTI-IAS manages the India Growth Fund Inc, an offshore fund of UTI. It also renders fund accounting and compliance services to UTI offshore funds -- namely India Fund, India Access Fund, India Information Technology Fund and India Public Sector Fund.

The FII status would enable these firms to manage foreign investment in the Indian capital market through the portfolio investment route. According to Sebi regulations, asset management companies and portfolio managers registered with Sebi can register themselves as FII to manage foreign investments in the Indian capital market through the portfolio investment route. Domestic-approved asset management companies would be required to first seek registration as portfolio managers.

As per the Sebi regulations, the domestic entities registered as FIIs under the regulation would be permitted to raise funds abroad only if they are also registered with the appropriate foreign regulatory authority. In other cases, they would only be permitted to manage funds raised by an FII incorporated abroad as its agents.

"Our subsidiary specialises in providing portfolio management services on India domestic equities, Indian GDRs and Indian ADRs to high networth individuals and institutions based outside India," said a Kotak official.