Mumbai: The Securities and Exchange Board of India (SEBI)  has simplified norms for registration of foreign institutional investors (FIIs) and sub-accounts and allowed sovereign wealth funds, university funds, endowments and charitable trusts to register as foreign institutional investors (FIIs).

The SEBI  also decided to accord FII status to asset management companies promoted by non-resident Indians (NRIs) and allow them to buy shares in the open market, provided they do not invest in "proprietary funds".

''Asset management firms founded by overseas Indians, advisors or institutional portfolio managers in the NRI category would also be eligible to be registered as FIIs under similar conditions,'' the market regulator said in a statement.

FIIs have also been permitted to invest in collective investment schemes, where individuals and institutions collectively invest in various instruments.

To qualify as a sub-account, a foreign corporate must be listed abroad and must have assets of at least $2 billion and a track record of profits of at least $50 million in the three preceding years. Individuals who have not been Indian citizens and are seeking sub-account status must have a net worth of over $50 million.

Last year, in a bid to curb the use of participatory notes (P-notes), the market regulator had asked portfolio investors to register and help track the source of funds.

In order to streamline the process of registration, SEBI has modified the application forms for grant of registration as a FII and sub-account.

The market regulator has amended SEBI (Foreign Institutional Investors) Regulations, 1995, vide a notification dated 22 May. 

The salient features of the amendments are: 

The policy measures on offshore derivative instruments (participatory notes) and changes to the registration criteria specified by SEBI on 25 October 2007 have been incorporated in the regulations.

In order to streamline the process of registration, the application forms for grant of registration as an FII and sub-account have been modified. 

An asset management company, investment manager or advisor or an institutional portfolio manager set up and/ or owned by non resident Indians (NRIs) shall be eligible to be registered as FII subject to the condition that they shall not invest their proprietary funds. This has been enabled by suitable modification to Explanation II under Regulation 13 of the said regulations.

The type of securities in which FIIs are permitted to invest has been widened to include schemes floated by a 'Collective Investment Scheme.'