After FPIs raise concerns, Sebi, CBDT ease onboarding rules

MUMBAI : Markets regulator Sebi and the Central Board of Direct Taxes (CBDT) have removed some of the Income Tax Permanent Account Number (PAN)-related difficulties that foreign funds were facing in order to register themselves in India. The move is part of Sebi’s ease of investing initiative to simplify registration process for foreign portfolio investors.

After CBDT notified new income tax rules and introduced new forms on March 20, FPIs raised some concerns relating to those rules and forms, and approached the regulator, a Sebi release said. Post this development, Sebi engaged with CBDT to address their concerns.

CBDT has now clarified that in the common application form (CAF) which FPIs use to register with Sebi to open bank and demat accounts, in order to apply for PAN, the authorised signatory (AS) for the FPI can sign the document.

Earlier rules had stipulated that the representative assessee (RA) or the authorised representative (AR) had to sign the CAF. The CBDT also allowed FPIs to use ‘0000000000’ for Taxpayer Identification Number (TIN) when TIN or its equivalent is not applicable for a jurisdiction, the Sebi release said.

In the column for contact details, if the mobile number of the FPI is not available, landline number can be used, the release said. “If PAN, Aadhaar and passport number of the AS are available, the same may be furnished. In case these details are not available, the FPI registration number can be provided.”