In order to attract more overseas investment into the country, the government is working on bringing new norms for a common know your customer (KYC) for foreign institutional investors (FIIs). While addressing the Rajya Sabha on the Securities and Exchange Board of India (Amendment) Bill, 2013, Finance Minister P Chidambaram said, ‘government will soon come out with a new set of norms that will have a common KYC across various regulators, be it pension, banking, stocks or insurance. There should be one KYC.’
By adding further he said, if a new FII applies in India, it has to go through due diligence and once registered it has to go through KYC norms. Currently, there are 1,756 FIIs registered in the country and it takes a maximum of three weeks for an FII to register with Securities and Exchange Board of India (SEBI). Chidambaram also assured of serious action in matters of insider trading and said that SEBI has been asked to step up systems and surveillance to deal with such matters.
Observing that the cumulative investment graph of FIIs in the country is rising, Chidambaram said, 'during the year 2012, there has been an investment of $31 billion by FIIs. During the current year from January 1 till date, there has been an investment of $10 billion by FIIs.’ Pursuant to which Indian stock markets have risen by 25 per cent and have given a good return. Chidambaram also hoped for more investments coming in from FIIs in the stock markets, which will further enhance returns to investors.
Meanwhile, the SEBI (Amendment) Bill, 2013, which was passed in the Rajya Sabha by voice vote also sought the appointment of a retired High Court judge having held the position for the next seven years for heading the Securities Appellate Tribunal (SAT). As per existing provisions, only a serving or retired Supreme Court judge can head the Tribunal, but government was finding it difficult to fill the slot.
