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Chinese investors likely to face Sebi heat after change in FDI rules

Chinese investors likely to face Sebi heat after change in FDI rules

The Securities and Exchange Board of India (Sebi) is likely to make investment rules more stringent for China and other neighbouring nations.

This follows the recent modification in the Union government’s foreign direct investment (FDI) norms, with China at the centre of the tweak.

Besides stepping up scrutiny, Sebi could put a cap on the purchase limit, beyond which additional approvals would be required, said a person privy to the initial discussion. Sebi may also ask custodians not settle any trade without proper identification of end-beneficiaries.
Last week, the government removed all neighbouring countries from the automatic FDI route. What was applicable only to Pakistan and Bangladesh — the two countries that were barred from automatic FDI — has now been extended to all neighbouring countries.

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