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Sebi issues consultation paper on OFM norms

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Capital markets regulator Securities and Exchange Board of India ( Sebi) has issued a consultation paper proposing changes to regulations regarding portfolio managers to enable fund managers to handle foreign money from Indian shores.
The amendments were approved by Sebi’s board at a meeting held on June 17.
Within the consultation paper, Sebi has proposed to insert offshore fund managers (OFMs) or eligible fund managers ( EFMs) as a new chapter in the existing norms.
The change may allow Sebi registered portfolio managers to act as offshore fund managers with prior intimation to Sebi.
Eligible fund managers/ offshore fund manager acting on behalf of an eligible investment fund ( EIF) can register under the PMS regulation, subject to conditions.
Sebi has said in the paper, issued on Tuesday, offshore fund manager will be required to have a minimum networth of Rs. 2 crore apart from appointment of a principal officer and a minimum of two employees with requisite qualification and experiences.
Among other changes, they have to also declare compliance under provisions of Section 9 A of the Income Tax Act.
Recently, the government allowed a taxation incentive under Section 9A of the Income Tax Act for offshore fund managers who are keen to relocate to India. A new section in the Act says fund management activity carried out through an EFM located in India and acting on behalf of an EIF would not constitute a business connection in India.
Business Standard New Delhi, 22th July 2016

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