JP Morgan Chase Bank Pays ₹34.42 Lakh to Settle SEBI Proceedings Over FPI Compliance Lapses
Moneylife Digital Team 23 March 2026
JP Morgan Chase Bank has settled proceedings with the market regulator Securities and Exchange Board of India (SEBI) by paying a settlement amount of ₹34.42 lakh for alleged violations of foreign portfolio investor (FPI) regulations.
 
According to the settlement order, JP Morgan Chase Bank filed a suo-motu application under SEBI Settlement Regulations, 2018, seeking to resolve enforcement proceedings related to non-compliance with provisions of the SEBI Foreign Portfolio Investors Regulations, 2014 and 2019.
 
SEBI's findings indicate that the Bank, acting as a designated depository participant, granted category II FPI licences to four UK-based entities that were not registered with the UK Financial Conduct Authority (FCA), thereby violating regulatory eligibility requirements.  These entities were later reclassified as Category I FPIs under the 2019 regulations without verifying their regulatory status, resulting in further compliance lapses. 
 
The regulator also flagged delays in responding to a material change involving the merger of an FPI entity. Although the bank was informed of the merger on 1 November 2024, it took more than a month to advise fresh registration and restrict trading activity. During this period, the FPI conducted 64 purchase transactions, highlighting gaps in timely oversight and regulatory compliance. 
 
Following deliberations with SEBI’s internal committee (IC) in October 2025, the bank revised its settlement proposal and offered ₹34.42 lakh. 
 
The high-powered advisory committee (HPAC) recommended acceptance of the proposal, which was subsequently approved by SEBI’s panel of whole-time members (WTM) in January 2026. The payment was confirmed in February 2026, leading to the closure of the matter under the settlement mechanism. 
 
SEBI clarified that while no enforcement action will be initiated in view of the settlement, it retains the right to reopen the case if any representation made by the bank is later found to be untrue or if the settlement conditions are breached.
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