CitiCorp Investment Bank (Singapore) Ltd has agreed to pay ₹36 lakh to settle allegations of violating the Securities and Exchange Board of India (SEBI) Foreign Portfolio Investor (FPI) regulations. The violations included the issuance of offshore derivative instruments (ODIs) to Symmetry Master Fund Ltd (SMFL) without completing the required Know Your Client (KYC) checks.In a settlement order issued on March 6, SEBI detailed the case, stating that the bank issued an ODI to SMFL on December 19, 2023, without fulfilling the KYC norms as mandated under Regulation 21(1)(c) of the FPI regulations. The bank did not perform fresh KYC checks before issuing the instrument, thus violating the regulations.
The investment bank later completed the KYC checks for SMFL on January 10, 2024. However, the regulatory fee of $800 associated with the ODI, which was due immediately after issuance, was not deposited with SEBI until February 26, 2024, resulting in a 69-day delay. This delay contravened Regulation 21(4) of the FPI regulations, as well as Clause 1 of Part C of the II Schedule of the regulations.
SEBI also found that CitiCorp Investment Bank failed to implement the necessary systems and controls for issuing ODIs and adhering to KYC requirements, breaching Paragraph 3(iii) of Part D of SEBI’s Master Circular.
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