The Securities and Exchange Board of India (SEBI), vide circular dated 27 July 2023 (available here) has made it mandatory for non-individual foreign portfolio investors (FPI) to provide details of their Legal Entity Identifier (LEI) code in the 'Common Application Form' (CAF), which is an application form used for registration of FPIs with SEBI, allotment of permanent account number (PAN), and know your customer (KYC) for opening of bank and demat account in India.
Earlier, FPIs were only required to provide details of their LEI on a voluntary basis. LEI is a global reference number in the form of a unique alpha-numeric 20-character code used to provide unique identification to legal entities engaged in financial transactions. It contains information about the ownership structure of the legal entity. LEI can be obtained from a Local Operating Unit accredited by the Global Legal Entity Identifier Foundation. In India, LEI may be obtained from Legal Entity Identifier India Limited (available here). In India, as per the RBI directions, all non-individual borrowers having total exposure of INR 250 million are required to obtain LEI.
Pursuant to the circular, (i) non-individual FPIs seeking a new registration, PAN or opening of bank accounts must provide their LEI code in the CAF; and (ii) all existing non-individual FPIs must provide details of their LEI to their designated depository participants within 180 days from the date of issuance of the circular i.e. 27 July 2023.
It must be noted that failure to provide LEI within 180 days will result in blocking of the accounts for any further purchases until LEI is provided to the depository participant. Further, FPIs must also ensure that their LEI code is always active, and in case of expiry / lapse of the LEI, their accounts will be blocked for any further transactions till the renewal of the LEI code.
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