No Prior RBI approval for FII registration

In terms of the FII regulations issued by the Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI), an applicant seeking registration as a Foreign Institutional Investor (FII) was required to obtain prior permission of the SEBI as also of the RBI. Though the approval process involved was a 'single window clearance' , the applicant had to make an application, in duplicate, to the SEBI who, in turn, would forward one set of application to the RBI, with its in-principle approval, to enable the RBI to convey its approval. It was only after the RBI's permission that the SEBI would give its registration certificate. The RBI has now vide its circular dated December 17, 2003, done away with the need for a prior approval of the RBI while seeking the FII registration. Thus, henceforth an applicant will have to obtain permission for the FII registration only from the SEBI, and such SEBI-registered FII or its sub-account is permitted to open a foreign currency denominated account and/or a special non-resident rupee account, invest in the permitted Indian securities, etc., without the prior permission of the RBI. This should reduce the time taken in obtaining the FII registration.

Source: A.P. (DIR Series) Circular No.53 dated December 17, 2003.