CIR/IMD/FII&C/7/2011
To
All Foreign Institutional Investors (FIIs)through their designated Custodians of Securities (Custodians)
Dear Sir/Madam,
Sub: Reporting of Offshore Derivative Instruments(ODIs)/ Participatory Notes(PNs)activity
1. Please refer to SEBI Circular No. CIR/IMD/FIIC/1/2011 dated January 17, 2011 andSEBI Circular No. CIR/IMD/FIIC/6/2011 dated May 12, 2011 on the captioned subjectwherein the implementation date of the new reporting format was deferred in view ofclarifications sought with regard to the said format.
2. The consultation process, in this regard, has been concluded on June 03, 2011 andthe following clarifications are being provided herewith:-
a. If an ODI (e.g. on MSCI India Index) is hedged with multiple types of Indiansecurities and left partly unhedged, it may be split in separate rows with eachrow for each Indian security and a blank column for the unhedged portion. Theoutstanding value of ODIs shall be summation of all such rows.
b. The current methodology of reporting F&O positions will be continued. Theoutstanding value of ODIs shall continue to be represented in notional terms.
c. The ODI issuers shall link hedges to the extent that such a link can be made.
d. The FIIs shall work out the linkages for all outstanding ODI positions as onSeptember 30, 2011. This report shall be uploaded to SEBI by the entities inMarch 2012 along with the upload of the first six months™ lag transactionreports.
e. The column ˜Location of end beneficial owner of the Offshore DerivativeInstrument™ in Annexure A shall state the country of the end beneficial owner.
f. It is to be clarified with reference to Para 5 of the SEBI circular dated January17, 2011, as regards FII to FII ODI/PN activity, the reporting/ issuer FII shallprovide the SEBI Registration No. of the subscriber FII in addition to the nameof the FII.
3. As per circular dated May 12, 2011 the date of implementation of the new reportingformat was made effective for month of July 2011 report to be submitted by August 07,2011. During the consultation process, it was represented that system changes forincorporating the clarifications would require further time than that already provided incircular dated May 12, 2011.
4. In view of the above, it has been decided to grant further time for implementation ofthe reports and that the first monthly summary report shall be submitted for the monthof September, 2011 before 7th October, 2011.
5. The first such transaction-wise details in Annexures shall be submitted in March 2012along with the outstanding positions as on September 30, 2011 and thereafter withsuch six months™ lag.
6. Till such time the new reporting format is implemented, the FIIs shall continue to filethe reports in the existing format.
7. The custodians are requested to bring the contents of this circular to the notice of theirFII clients.
8. This circular is issued in exercise of the powers conferred under Section 11 (1) of theSecurities and Exchange Board of India Act 1992, read with Regulation 20 and 20A ofthe SEBI (Foreign Institutional Investors) Regulations, 1995 to protect the interests ofinvestors in securities and to promote the development of, and to regulate thesecurities market.
9. A copy of this circular is available at the web page F.I.I. on our websitewww.sebi.gov.in.
Yours faithfully,
Jeevan Sonparote
General Manager
+91-22-26449110
jeevans@sebi.gov.in
