On July 27, SEBI (The Securities and Exchange Board of India) made a compulsion to submit the LEI (Legal Entity Identifier) details for all the FPIs (Foreign Portfolio Investments).
What is LEI? It’s a unique code made of 20 characters which is used to identify various financial entities globally. To date, LEI is only an optional choice during the registration and KYC processes, but all the presently existing FPIs are commanded to update their respective designated depositary participants within a duration of six months. Also, it’s strongly revealed by the SEBI that the failure of this command will to the blocking of their respective accounts.
Needless to say that it’s a must for all the new accounts heading to register to submit the LEI and head forward with the new regulations only. Moreover, it is being disclosed that all the accounts of FPIs with temporary failure of LEIs will stay blocked till they get renewed accordingly.
As per the email sent by SEBI to all the DDPs in May 2023, it is asked by the capital markets regular to find out the parent institution as the present legal entity and not the sub-funds. Till that time, DDPs were commanded to submit the KYCs only at the legal entity levels and also to update the beneficial owner data with fresh details by September 30, 2023.