Section 6 in Securities And Exchange Board Of India (Foreign Institutional Investors) Regulations, 1995
6. Consideration of application.-
[(1)] [Renumbered by S.O. 180(E), dated 29.2.2000] For the purpose of the grant of certificate the Board shall take into account all matters which are relevant to the grant of a certificate and in particular the following, namely:-(a)the applicant's track record, professional competence, financial soundness, experience, general reputation of fairness and integrity:[Provided that in case of a newly established fund, the track record of the investment manager of the fund who has promoted it may be taken into consideration:Provided further that such investment manager shall furnish the details in respect of disciplinary action, if any, taken against it.] [Inserted by Not. No. F.No. LAD-NRO/GN/2008/10/126204, dated 22.5.2008](b)whether the applicant is regulated by an appropriate foreign regulatory authority:[Provided that university funds, endowments, foundations, charitable trusts and charitable societies may be considered for registration even though they are not regulated by a foreign regulatory authority;] [Inserted by Not. No. F.No. LAD-NRO/GN/2008/10/126204, dated 22.5.2008](c)whether the applicant has been granted permission under the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973) by the Reserve Bank of India for making investments in India as a Foreign Institutional Investor;(d)whether the applicant is -(i)[ an institution established or incorporated outside India as a pension fund, mutual fund, investment trust, insurance company or reinsurance company;] [Substituted by S.O. 1332(E), dated 21.8.2006](ia)[ an International or Multilateral Organisation or an agency thereof or a Foreign Governmental Agency, [Sovereign Wealth Fund] [Inserted by S.O. 1332(E), dated 21.8.2006] or a Foreign Central Bank;](ii)[ an asset management company, investment manager or advisor [* * *] [Substituted by S.O. 1332(E), dated 21.8.2006] bank or institutional portfolio manager, established or incorporated outside India and proposing to make investments in India on behalf of broad based funds and its proprietary funds, if any;](iii)[ a trustee of a trust established outside India and proposing to make investments in India on behalf of broad based funds and its proprietary funds, if any;][Inserted by Not. No. F.No. LAD-NRO/GN/2008/10/126204, dated 22.5.2008](iv)[ university fund, endowments, foundations or charitable trusts or charitable societies].Provided that while considering the application from applicants under clause (iv) the Board may take into account the following, namely:-(a)whether the applicant has been in existence for a period of at least 5 years;(b)whether it is legally permissible for the applicant to invest in securities outside the country of its incorporation or establishment;(c)whether the applicant has been registered with any statutory authority in the country of their incorporation or establishment;(d)whether any legal proceeding has been initiated by any statutory authority against the applicant].(e)[ whether the applicant has been serving public interest] [Inserted by Not. No. F.No. LAD-NRO/GN/2008/10/126204, dated 22.5.2008].Explanation:-For the purposes of this regulation, "broad based fund" means a fund, established or incorporated outside India, which has at least twenty investors, with no single individual investor holding more than forty-nine per cent of the shares or units of the fund:Provided that if the broad based fund has institutional investor(s), it shall not be necessary for the fund to have [twenty investors] [Substituted by S.O. 688(E), dated 26.8.1999]:Provided further that if the broad based fund has an institutional investor who holds more than [forty nine per cent] [Inserted by Not. No. F.No. LAD-NRO/GN/2008/10/126204, dated 22.5.2008] of the shares or units in the fund, then the institutional investor must itself be a broad based fund; [* * *] [Omitted by Not. No. F.No. LAD-NRO/GN/2008/10/126204, dated 22.5.2008](e)Whether the grant of certificate to the applicant is in the interest of the development of the securities market;(f)[ Whether the applicant is a fit and proper person.] [Inserted by S.O. 823(E), dated 5.12.1997](2)[(a) A domestic portfolio manager or domestic asset management company shall be eligible to be registered as a foreign institutional investor to manage the funds of sub-accounts; [Inserted by S.O. 180(E), dated 29.2.2008](b)The domestic portfolio manager or domestic asset management company shall make an application in terms of regulations 3, 4 and 5;(c)for the grant of certificate to a domestic portfolio manager the Board shall consider the following:(i)whether the applicant is an approved asset management company or a registered portfolio manager and that the approval or registration is valid;(ii)whether any disciplinary proceeding is pending before the Board against such applicant.]
