Standard Chartered Bank Settles FPI Rule Violations Case With Sebi By Paying Rs 57.2 Lakh

Standard Chartered Bank has settled the case with the Securities and Exchange Board of India (Sebi) over alleged violations of foreign portfolio investor (FPI) rules. Standard Chartered Bank has agreed to pay Rs, 57.2 lakh as settlement over multiple lapses in its role as a designated depository participant (DDP) for FPIs.

The markets regulator had initiated a case against the bank and issued a show-cause notice (SCN) to the bank on June 17, 2025, over multiple failures in compliance with FPI monitoring and disclosure norms. Sebi in the SCN said that the bank had failed to report delays in notifying material changes in beneficial ownership by certain FPIs within the time frame. As a DDP, Standard Chartered bank is required to monitor FPI disclosures and notify Sebi if the investors themselves fail to report changes for more than six months.

Sebi also found that the bank delayed processing investor grouping updates. Sebi flagged that the bank took around 20 days to notify the National Securities Depository Limited, the depository, after receiving complete documentation from investors who sought changes in grouping structures.

Standard Chartered Bank had granted exemptions to certain beneficial owners of FPIs from granular disclosure requirements without ensuring whether these were in compliance with the regulatory framework. The bank also failed to exercise due diligence to ascertain FPIs investor grouping requirements, and these violations have led to the SCN issued by the regulator.

The bank filed a settlement application following the SCN and proposed to settle instant proceedings initiated against them "without admission or denial" of the findings of fact and conclusion of law. The internal committee of the regulator, in consideration with the High Powered Advisory Committee (HPAC), recommended the settlement terms, which were later approved by the panel of Sebi’s Whole-time Members in January 2026.

Sebi has disposed of the adjudication proceedings through a settlement order passed on March 17. However, the regulator said that it retains the right to reopen the case if representations made during the settlement process are found to be false or if any of the terms are breached.