BNP Paribas settles case with Sebi over alleged FPI law violation

BNP Paribas settles case with SEBI for FPI law violation

BNP Paribas has settled a case with Sebi over alleged violation of Foreign Portfolio Investor (FPI) regulations in granting and re-categorising registrations, including granting Category II and Category I licences to entities that did not meet eligibility norms.

On the violation, Sebi’s settlement order by Adjudicating Officer Sudeep Mishra said, “Failure to identify that six FPIs were not regulated by UK-FCA at the time of conversion, and incorrectly re-categorizing six FPIs as Category I under FPI regulations, 2019.” BNP Paribas, a Designated Depository Participant (DDP), filed a settlement application under Sebi’s Settlement Proceedings Regulations, 2018, without admitting or denying the finding

Though the order does not reveal the name of the FPI in whose case the issue of violation was found, since the name was redacted in the release of the order, but sources say it could be related to Winton Investment Trust Plc Re Jersey.

Sebi’s Internal Committee (IC) proposed a settlement amount of Rs 39.97 lakh, which was later approved by the High-Powered Advisory Committee (HPAC) and Sebi’s Whole-Time Members (WTMs).

In the settlement order, the regulator reiterated that it retains the right to re-open the case if any non-disclosure or misrepresentation is found in the settlement process.