INSUBCONTINENT EXCLUSIVE:
Market regulator the Securities and Exchange Board of India(Sebi) has opened the doors for Mauritius based funds to get preferential
category I foreign portfolio investor(FPI) license
Until now, only the off-shore funds coming from jurisdictions that are Financial Action Task Force(FATF) complaint were allowed to obtain a
However, on Tuesday Sebi amended the rules saying even the funds coming from those countries which are non-FATF complaint may obtain FPI
license if central government approves
In other words, Mauritius based funds can now obtain category I license, if government of India provides an exemption.
The development
The changes will also put to rest the concerns Mauritius based funds faced due to indirect transfer taxes
In the union budget for FY20, the government removed the exemptions category II FPIs had from indirect transfer taxes
None of the Mauritius based funds were able to get a category I license as the Island nation was not FATF complaint
One can now expect non FATF countries such as Mauritius and those from the Middle East trying to lobby and get included in the
Several Mauritius based funds had represented to the central government for being treated on par with the Singapore based funds.
