JP Morgan Chase Bank N.A. Resolves Dispute with SEBI over FPI Regulation Non-Compliance

Market Regulator Settles Enforcement Proceedings against JP Morgan Chase Bank N.A.

The Securities and Exchange Board of India (SEBI) has settled potential enforcement proceedings against JP Morgan Chase Bank N.A. after the bank paid Rs 34.42 lakh to resolve multiple compliance lapses related to foreign portfolio investor (FPI) regulations.

The settlement follows a suo motu application filed by JPMorgan under SEBI's settlement framework, wherein the bank agreed to resolve the matter without admitting or denying the findings. The case stems from three broad compliance failures, including the grant of FPI licences to unregulated entities.

Key Issues:

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• Grant of FPI licences to unregulated entities: JPMorgan, acting as a designated depository participant (DDP), granted Category II FPI registrations to four UK-based entities that were not listed as regulated entities with the Financial Conduct Authority.
• Incorrect reclassification under 2019 norms: After the new FPI regulations came into force in 2019, the same entities were reclassified as Category I FPIs without verifying their regulatory status.
• Delay in acting on material change in FPI structure: A merger involving an FPI (Care Super Pty Ltd. merging with Spirit Super) was not acted upon promptly, resulting in a 38-day delay in advising fresh registration.

Settlement Details:

• Proposed settlement amount: Rs 34.42 lakh proposed by JPMorgan
• Review and approval: Reviewed by SEBI's High-Powered Advisory Committee (HPAC) and later approved by the panel of Whole Time Members
• Payment confirmation: SEBI confirmed receipt of the payment in February 2026

Under the settlement order, SEBI will not initiate enforcement proceedings for the cited violations. However, it retains the right to reopen the case if the disclosures made by the bank are later found to be incorrect or settlement conditions are breached.

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