JP Morgan Chase Bank settles FPI rules case with Sebi; pays Rs 22.10 lakh

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JP Morgan Chase Bank NA on Friday settled with market regulator SEBI a case regarding alleged breaches of FPI rules over payment of Rs 22.10 lakh towards the settlement amount.

The matter was settled by JP Morgan Chase Bank (JPMC) through a settlement order “without acknowledgment or denial of the facts.”

“It is hereby ordered to eliminate immediate dismissal proceedings commenced against the JPMC Video Offer Notice (SCN) dated September 23, 2022, and Supplementary Offer Cause Notice (SCCN) dated December 29, 2022,” it said in the settlement order.

Sebi received a letter in August 2021 from JPMC informing the regulator of the delay in reporting the change in material information (merger) of Fidelity Investments Money Management (FIMM), which is registered as FPI, with its subsidiary Fidelity Management & Research Corporation ( FMRC).

After receiving the communications, the market watchdog conducted an examination and noted that the merger of FIMM with FMRC resulted in the discontinuance of FIMM, the entity that was registered as FPI.

However, after the merger, the surviving FMRC entity, which did not obtain FPI registration, is operating in the Indian Stock Exchange under the name, accounts and FPI registration of FIMM.

It was also noted that JPMC failed to prevent FMRC from trading in the stock market even though there were materials on record indicating that FIMM had merged into FMRC and that FMRC did not have a valid FPI registration.

Furthermore, Sebi initiated court proceedings against the notice (JPMC) alleging that it violated the provisions of the Foreign Portfolio Investors (FPI) Standards.

Subsequently, Sebi issued an Offer Cause Notice and a Supplementary Offer Reason Notice in September and December 2022, respectively to JPMC.

JP Morgan Chase has submitted its settlement application to Sebi and proposed to settle the alleged violations by paying Rs 22.10 lakh. The amount has been approved by the organizer.

Accordingly, JP Morgan Chase transferred the amount and settled the case with the regulator.

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