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NISM Certifications · NISM-Series-VI: Depository Operations · Foreign Portfolio Investors (FPI)

An FPI's custodian wants to know which entity is responsible for reporting the FPI's securities holdings and transactions to the depository in the course of its day-to-day operations. Which is correct?

The FPI's SEBI-registered custodian handles settlement and reporting on its behalf, providing information to depositories and the regulator. Registrars, brokers and the investor's home regulator do not take on this function for the FPI's Indian holdings.

  1. AThe custodian acts on behalf of the FPI and settles its trades and reports to the regulators/depositoriesCorrect
  2. BThe issuer company's registrar alone does so
  3. CThe stock exchange broker alone does so
  4. DThe investor's home country regulator does so

Explanation

Every FPI must appoint a SEBI-registered custodian, who settles trades, maintains records and provides reporting and monitoring information to the depositories and regulator. Registrars, brokers and foreign regulators do not perform this function for the FPI.

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