In an attempt to further simplify the foreign investment regulatory regime in India, the K B Chandrasekhar Committee has, inter alia, suggested the clubbing of Foreign Institutional Investors (FIIs), subaccounts and Qualified Financial Investors (QFIs) into a single investor class called “Foreign Portfolio Investors” (FPIs). The Non-Resident Indian (NRI) and the Foreign Venture Capital Investor (FVCI) categories have been retained due to the special nature of these investments.

An investor must be free to come from any jurisdiction which has reasonable standards against money laundering. Inflows from both institutional and retail investors must be encouraged alike. A laudable departure under the report is that the SEBI registration requirement for making portfolio investments has been removed and private sector KYC, though graded based on risk posed, would suffice. Another obstruction to the inflow of foreign investments is the uncertainty related to taxation and efforts must therefore be made towards ensuring certainty as far as taxation is concerned.