CIR/IMD/FIIC/ 09/ 2014 April 28, 2014
INFRASTRUCTURE
FACILITIES
AND
SUBMISSION
OF PERIODIC REPORTS
1.
The SEBI (Foreign Portfolio Investors) Regulations, 2014 ("the
Regulations") have been notified on January 07, 2014. Pursuant to the
implementation of Foreign Portfolio Investor ("FPI") regime, SEBI
approved Designated Depository Participants ("DDPs") would grant
registration to FPIs on behalf of SEBI and also carry out other allied
activities in compliance with Regulations and other guidelines, circulars,
issued thereunder.
2.
In order to ensure proper functioning of the FPI regime, it is
imperative that DDPs should have adequate infrastructure facilities and
appropriate systems and controls in place. Accordingly, it has been decided as
follows:
2.1.
Segregation of activities: Every DDP shall
maintain arms length distance from other businesses carried out by it
such that:
a)
the activities relating to its business as DDP is segregated from all
other activities and is not influenced by its other activities;
b)
its officers and employees engaged in carrying out functions of DDPs
shall not be engaged in any other activity carried on by it and shall directly
report to its chief compliance officer.
2.2.
Infrastructure: Every DDP shall have necessary infrastructure, including adequate office
space, adequate and competent manpower and computer systems capability required
to discharge its activities as DDP in compliance with Regulations and other
guidelines, circulars, issued thereunder.
2.3.
Manual: Every DDP shall have a complete manual, setting out the systems and
procedures to be followed for the effective and efficient discharge of its
functions as DDPs.
2.4. Monitoring of
systems and controls: Every DDP shall have adequate mechanisms for the purposes of
reviewing, monitoring and evaluating its controls, systems, procedures and
safeguards. Further the DDPs shall carry out internal audits of their systems.
3.
Submission of periodic reports to SEBI: Every DDP shall
submit periodic reports as enclosed in the Annexure A to SEBI and such
other reports as may be required by SEBI.
4.
The provisions of this circular would be applicable upon commencement of
the Foreign Portfolio Investor ("FPI") regime.
5.
This circular is issued in exercise of powers conferred under Section
11(1) of the Securities and Exchange Board of India Act, 1992 to protect the
interests of investors in securities and to promote the development of, and to
regulate the securities market.
6.
The circular is available on SEBI website at www.sebi.gov.in under the
categories "Legal framework" and "information for - FII".
Yours faithfully,
S. Madhusudhanan
Deputy
General Manager
Tel
No.: 022-26449614
Email:
smadhu@sebi.gov.in
For Annexures: Kindly visit http://www.sebi.gov.in/cms/sebi_data/attachdocs/1398685079507.pdf