The Securities and Exchange Board of India is learnt to be considering further relaxations in the entry norms for foreign institutional investors, which would allow them easier access to commence operations in India.
FIIs have suggested that there should be a pre-determined criteria for selection of FIIs wishing to operate in the country, on the applicability of which they can commence operations immediately.
They have also suggested the circulation of a negative list which will weed out undesirable entities form operating in the country.
Last December Sebi had relaxed the registration norms for FIIs, bringing down the registration time from 3 to 4 weeks to 14 days. But even this is being seen as an inordinately long time by the FIIs.
"Relaxation in time will help in diverting funds from other Asian countries to India," they pointed out.
A pre-determined criteria could probably specify a impeccable track record for an entity for a certain number of years in total compliance with all the rules and regulations of its parent country.
Such entities can be automatically be given clearance for commencing their operations in India on an immediate basis without having to wait for two weeks for documentation processing.
In fact cutting down on the documentation is also one of the demands made by the FIIs, in their representations before the markets regulator.
These norms are in line with those being followed by other markets in Asia, which attract more dollar inflows than India.
At present Sebi regulations require FIIs wishing to operate to have a track record, professional competence, financial soundness, experience, general reputation of fairness and integrity.
The applicant should be regulated by an appropriate foreign regulatory authority such as a securities regulator, central bank or government ministry, agency or department.
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