SEBI grants foreign funds at GIFT City full investment access for NRIs

The Securities and Exchange Board of India (SEBI) announced on Tuesday that foreign funds established at Gujarat International Finance Tec-City (GIFT City) in Gujarat can now accept full investment from non-resident Indians (NRIs) and individuals of Indian origin.

Under the new regulations, these funds are required to provide detailed disclosures about their investors if more than 33 per cent of their equity assets under management originate from a single Indian group.

To ensure compliance, funds must furnish identity documents of their investors, such as passports or Permanent Account Numbers (PAN), to SEBI. Alternatively, they can adhere to the regulatory framework established by the International Financial Services Regulatory Authority, which oversees financial services in GIFT City.

Additionally, SEBI mandated that asset management companies implement measures to prevent front-running and market abuse. These measures include heightened surveillance, internal controls, and escalation processes designed to detect and address various forms of misconduct, including front-running, insider trading, and the misuse of sensitive information.

The regulatory move aims to streamline investment procedures and enhance transparency within the financial ecosystem at GIFT City. By facilitating greater participation from NRIs and Indian-origin individuals, SEBI seeks to bolster the city's position as a global financial hub while safeguarding against potential market abuses.

(With Reuters inputs)