Select FIIs may get direct India entry

The proposed automatic approval will be subject to KYC (know-your customer) requirements being complied by brokers and custodians, through whom foreign investors carry out their transactions. FIIs such as pension funds, endowment funds, university funds, insurance companies, banks and mutual funds are likely to be among the foreign institutional investors that may be allowed to invest directly in the Indian market, officials familiar with the development told ET. They said the capital market regulator was deliberating whether to do away with the registration process for any entity. However, the view taken by RBI on this will be crucial in formulating the policy. In the past, the central bank had expressed reservations relating to KYC norms given the threat of money laundering and terror financing. Currently, even though SEBI does the FII registration, it is the custodians of these investors who ensure that KYC norms are being complied with, and also maintain their own records of transactions.