New Delhi, March 20 American multinational bank JP Morgan Chase has settled with the capital markets regulator Sebi a case related to alleged violation of FPI rules after paying ₹34.42 lakh towards settlement charges.
The settlement order came after the bank filed a suo-motu settlement application with Sebi proposing to settle by "neither admitting nor denying the findings of fact and conclusions of law," the regulator said in its order passed on Friday.
According to Sebi, JP Morgan Chase had granted a Category II license to four FPIs from the UK that were not registered with the Financial Conduct Authority (FCA), in violation of market norms.
Further, after the introduction of the FPI Regulations, 2019, these four entities were re-categorized as Category I FPIs without verifying their regulatory status, Sebi noted.
In addition, the market watchdog found that the bank failed to promptly act on a material change involving the merger of an FPI entity.
Despite being informed on November 1, 2024, JP Morgan Chase delayed advising fresh registration and allowed transactions to continue for 38 days, during which the FPI undertook 64 purchase transactions, as per the order.
The Securities and Exchange Board of India (Sebi) said the delay amounted to non-compliance with provisions related to reassessment of eligibility and handling of material changes in FPIs.
Thereafter, Sebi's High Powered Advisory Committee and a panel of whole-time members approved the settlement terms, following which the bank remitted the amount of ₹34.42 lakh.
"... in terms of the Settlement Regulations, it is hereby ordered that any proceedings that may be initiated for the violations are settled in respect of the applicant (JP Morgan Chase Bank N A)," Sebi's Whole Time Members Kamlesh C Varshney and Amarjeet Singh said in the order.