Sebi mandates Legal Entity Identifier for all non-individual FPIs

Sebi on Thursday made it mandatory for all non-individual FPIs to provide their Legal Entity Identifier details

New Delhi: Capital markets regulator Sebi on Thursday made it mandatory for all non-individual Foreign Portfolio Investors (FPIs) to provide their Legal Entity Identifier (LEI) details in common application form used for registration, KYC and account opening.

LEI, a unique global identifier for legal entities participating in financial transactions, is designed to create a global reference data system that uniquely identifies every legal entity, in any jurisdiction, that is party to a financial transaction. It is a unique 20-character code to identify legally distinct entities that engage in financial transactions.

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Reserve Bank of India (RBI) directions mandate non-individual borrowers having aggregate exposure of above Rs 25 crore to obtain LEI code.

Presently, FPIs are required to provide their LEI details in the Common Application Form (CAF), used for registration, KYC and account opening of FPIs on a voluntary basis, the Securities and Exchange Board of India (Sebi) said in a circular.

“It has now been decided to mandate the requirement of providing LEI details for all non-individual FPIs,” it added.

Sebi said that all existing FPIs, including those applying for renewal, that have not already provided their LEIs to their Designated Depository Participants (DDPs) will be required to do so within 180 days, failing which their account will be blocked for further purchases until LEI is provided to their DDPs.

All fresh registration would be carried out after receiving the FPIs’ respective LEI details.

The markets regulator said FPIs are required to ensure that their LEI is active at all times. Accounts of FPIs whose LEI code has expired or lapsed will be blocked for further purchases in the securities market till the time the LEI code is renewed by such FPIs.

The new framework would come into force with immediate effect, Sebi said.