Standard Chartered Bank settles case with SEBI over FPI rule violations, pays Rs 57.2 lakh

Standard Chartered Bank settles case with SEBI over FPI rule violations, pays Rs 57.20 Lakhs

• SEBI settles case with Standard Chartered Bank for FPI violations
• Bank paid Rs 57.20 lakhs to resolve alleged compliance lapses
• Order highlights delays and due diligence failures by the bank

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Securities and Exchange Board of India (SEBI) has passed a settlement order in a case involving Standard Chartered Bank acting as a Designated Depository Participant (DDP), disposing of alleged violations related to foreign portfolio investor (FPI) regulations.

The case pertained to Standard Chartered Bank in its capacity as a DDP, where it was required to ensure adherence to disclosure norms, client-level due diligence, and regulatory reporting obligations for FPIs. Bank paid a settlement amount of Rs 57.20 Lakhs  towards settlement.

As per the settlement order, Bank failed to report to SEBI, instances of delay exceeding six months in the intimation of material changes relating to beneficial ownership in respect of certain FPIs. Also bank delayed processing of investor grouping changes and in certain cases took as much as 19 to 20 days for intimating the grouping changes to NSDL after receipt of complete documents from the FPIs. SEBI also alleged that bank failed to exercise due diligence to ascertain investor grouping of FPIs. Additionally, the bank granted exemptions from granular disclosure requirements to certain beneficial owners of FPIs without ensuring compliance with the applicable regulatory framework.

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SEBI had initiated adjudication proceedings against the bank for multiple alleged lapses in compliance with regulatory provisions governing FPIs and depository participants. The alleged violations included non-compliance with provisions under the SEBI (Foreign Portfolio Investors) Regulations, 2019, the SEBI (Depositories and Participants) Regulations, 2018, and various clauses of SEBI’s master circular and standard operating procedures relating to granular disclosures and due diligence requirements.

SEBI had initiated the proceedings, following the submission of a settlement application by the bank, the matter has now been resolved through the settlement mechanism, without admission or denial of guilt.

The order comes as part of SEBI’s continued scrutiny of intermediaries handling foreign investments, with a focus on strengthening transparency and compliance in the FPI ecosystem.

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