8 hrs ago
Sebi, RBI Coordinate to Speed FPI Onboarding, Strengthen Bond Markets
India’s market regulator and banking regulator are working more closely together.
They want foreign investors to be able to register and invest more quickly.
The goal is to reduce registration time from more than a month to five days.
Citi was the first designated depository participant to meet that five-day target.
The regulators are also studying ways for bond indexes to trade on stock exchanges.
This could make bonds easier to buy and sell.
Sebi has proposed online distribution partners to help people outside large cities invest in bonds.
It has also started testing digital tokens that represent corporate bonds.
Sebi Chairman Tuhin Kanta Pandey said coordination with the RBI has increased and helped resolve regulatory issues.
Sebi and the RBI are working to accelerate foreign portfolio investor onboarding to five days from more than a month.
Citi became the first designated depository participant to complete five-day onboarding after launching its eFPI service on 11 September.
The regulators are developing a framework for bond indices that could trade on exchanges to improve bond-market liquidity.
Sebi has also proposed fixed-income distribution networks and launched a pilot for tokenized corporate bonds.
- Who
- Securities and Exchange Board of India Chairman Tuhin Kanta Pandey, Sebi, and the Reserve Bank of India.
- What
- The regulators are coordinating to speed up foreign portfolio investor onboarding and improve bond-market liquidity.
- Where
- The remarks were made at the third annual conference of the Association of Portfolio Managers in India.
- When
- The announcement was made on Wednesday; Citi achieved five-day onboarding on 11 September.
- Why
- To resolve regulatory issues, attract foreign portfolio investors more efficiently, and make bond investing more accessible and liquid.
Key facts
- FPI onboarding target
- Five days, compared with a current timeline that can exceed one month.
- First five-day onboarding
- Citi became the first designated depository participant to achieve the target on 11 September.
- Initial eFPI phase
- The first phase covers regulated public funds, including mutual funds and unit trusts from the United States, Ireland, and Luxembourg.
- Bond-index proposal
- Sebi and the RBI are working on a framework for bond indices to trade on exchanges.
- Distribution proposal
- Sebi has proposed fixed-income channel partners to expand online bond access beyond major cities.
- Tokenized-bond pilot
- Sebi launched a pilot representing corporate bonds digitally through tokens based on distributed ledger technology.
Quotes
Tuhin Kanta Pandey
Chairman of the Securities and Exchange Board of India
“For example, on FPI onboarding, Sebi and RBI are currently engaged very actively on ironing out many issues so that we are able to see very fast onboarding of FPIs”
livemint.com
“There is much more active interregulatory coordination… say for RBI and Sebi. We have been working very closely and we've been able to sort out many issues”
livemint.com
Sources
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