Until recently the Cayman Islands Monetary Authority (CIMA) was not recognized by the International Organization for Securities Commissions (IOSCO) as an ordinary member. As a result, the Securities and Exchange Board of India (SEBI) – an IOSCO member itself – did not look favorably upon applications made by CIMA-registered funds and fund managers under the SEBI (Foreign Institutional Investors) Regulations, 1995 (FII regulations). However, with CIMA now being admitted as an ordinary member of IOSCO, funds and fund managers regulated by CIMA with an interest in the Indian market may well consider registering with SEBI.
[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”3″ ihc_mb_template=”2″ ]
Under the FII regulations, a fund or fund manager seeking registration as an FII with SEBI needs to be regulated by an “appropriate foreign regulatory authority”. This condition is now met, as SEBI recognizes ordinary members of IOSCO as appropriate foreign regulatory authorities. Given that Cayman Islands is a major international financial centre with over 9,000 registered funds, it is likely that many more Cayman Islands-based funds and fund managers will register themselves as FIIs with SEBI.
[/ihc-hide-content]
The legislative and regulatory update is compiled by Nishith Desai Associates, a Mumbai-based law firm. The authors can be contacted at nishith@nishithdesai.com. Readers should not act on the basis of this information without seeking professional legal advice.
