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SEBI issues circular on Segregated Nominee Account Structure in IFSC

CIRCULAR

SEBI/HO/MRD/DRMNP/CIR/P/2018/83

May 24, 2018

All recognized Stock Exchanges and recognized Clearing Corporations in IFSC

Dear Sir/Madam

Segregated Nominee Account Structure in International Financial Service Centre (IFSC)

With a view to further facilitate ease of market access for foreign investors in IFSC and based on feedback received from market participants, it has been decided to permit Segregated Nominee Account Structure in IFSC wherein orders of foreign investors may be routed through eligible Segregated Nominee Account Providers (hereinafter referred to as ‘Providers’), for trading on stock exchanges in IFSC while adhering to regulatory requirements, inter alia, relating to identification of end-client, Unique Client Code, order placement at client level, client level margining and position limits.

2. The broad features of the Segregated Nominee Account Structure are given in Annexure, enclosed herewith.

3. It shall be obligatory on the stock exchanges, brokers and ‘Providers’ to furnish to SEBI, inter alia, information relating to trades on stock exchanges in IFSC originated by/through ‘Providers’, including KYC details of their end-clients, as and when requested.

4. Stock exchanges in IFSC shall ensure that the provisions of Prevention of Money Laundering Act, 2002 (PMLA) and the rules thereof, including those relating to capturing the KYC information for sharing with the Central KYC Registry (CKYCR) to the extent applicable to FPIs, are adhered to by ‘Providers’ for their end-clients.

5. Stock Exchanges and Clearing corporations are directed to:
a) take necessary steps to put in place systems for implementation of the circular, including necessary amendments to the relevant bye-laws, rules and regulations;
b) bring the provisions of this circular to the notice of their members and also disseminate the same on their websites; and
c) communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Report.

6. This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Yours faithfully
(Sanjay Purao)
General Manager
Market Regulation Department
Email: sanjayp@sebi.gov.in
Encl: a/a

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