FPI Advisory Committee (FAC): The Securities and Exchange Board of India (SEBI) has constituted an expert group of Foreign Portfolio Investors (FPIs) to boost overseas flows into the country.

Key Points:

• The FPI Advisory Committee (FAC) will be chaired by former Chief Economic Adviser KV Subramanian.
• Committee consists of 14 other members representing foreign banks, stock exchange depositories, and RBI (Reserve Bank of India).
• The FAC has been mandated to provide advice on matters pertaining to FPI operations and investments in the financial markets, including steps to make it easier for FPIs to conduct business in India.
• The committee will review investment avenues available for FPIs and advise on the feasibility of new investment avenues.
• It will also suggest measures required to encourage FPI participation in the bond market.

Key Takeaways:

What is Foreign Portfolio Investment?

• FPI is an investment by non-residents in Indian securities including shares, government bonds, corporate bonds, convertible securities, units of business trusts, etc.
• The class of investors who make an investment in these securities is known as Foreign Portfolio Investors.

 What are the major laws and regulations applicable to an FPI in India?

• FPIs are primarily governed by The Securities and Exchange Board of India (SEBI).
• SEBI has recently introduced the SEBI (Foreign Portfolio Investors) Regulations, 2019, repealing the erstwhile 2014 Regulations.
• Further, FPIs are also required to comply with the Foreign Exchange Management Act, 1999 and the Income-tax Act, 1961.