3 hrs ago
Sebi Board Approves FPI Access, PMS and Settlement Overhaul
India’s market regulator, Sebi, approved several new financial-market rules.
Foreign investors will be allowed to participate in more non-agricultural commodity contracts.
They must close certain positions before physical delivery begins.
Portfolio managers will be allowed to create services that invest only in mutual funds.
They will also have more options to invest in some unlisted debt and overseas assets.
Sebi changed how companies and people can settle cases with the regulator.
Smaller settlement cases may now be processed more quickly.
Some financial firms will be allowed to identify investors who are experienced and able to take more risk.
Real estate and infrastructure investment trusts will also get a new way to raise money from foreign investors.
Foreign portfolio investors can access physically settled non-agricultural commodity derivatives, subject to exiting before delivery periods.
Sebi approved mutual-fund-only portfolio management services and expanded PMS investment options in India and overseas.
The revised settlement framework excludes wrongful gains from base-amount calculations and introduces faster processing for smaller cases.
Managers of AIFs, specialized investment funds and PMS can accredit investors, including eligible foreign portfolio investors.
REITs and InvITs can raise funds from foreign investors through depository receipts, while vault-manager rules will be expanded.
- Who
- The Securities and Exchange Board of India (Sebi), foreign portfolio investors, portfolio managers, alternative investment fund managers, asset management companies and eligible investors.
- What
- Sebi approved measures covering commodity-market access, portfolio management services, settlement proceedings, investor accreditation, advertising, REITs, InvITs and vault managers.
- Where
- India’s securities, commodity and investment markets, including permitted overseas markets.
- When
- At Sebi’s board meeting on Thursday; the settlement review followed a consultation paper issued in August.
- Why
- The measures are intended to improve foreign participation and commodity-market volumes, expand investment options, streamline settlements and facilitate foreign-capital inflows.
Key facts
- Commodity access
- FPIs may trade non-agricultural index derivatives and physically settled non-agricultural commodities, subject to position-exit requirements.
- Delivery deadline
- For physically settled non-agricultural commodities, FPIs must square off positions before the tender or staggered delivery period, three days before expiry.
- PMS minimum investment
- The current minimum investment for portfolio management services is ₹50 lakh.
- Settlement target
- Sebi expects the average gap between settlement amounts and subsequent penalties to narrow from about eight times to about four times.
- Fast-track threshold
- Settlement cases involving amounts of up to ₹10 lakh will not be referred to the High Powered Advisory Committee.
- Accreditation thresholds
- Stock-market exposure thresholds are ₹5 crore for individuals and certain trusts or proprietorships, and ₹20 crore for body corporates and other trusts.
- Depository receipts
- REITs and InvITs can raise funds from foreign investors through depository receipts.
Quotes
Sebi press release
The Securities and Exchange Board of India communication describing the investor-accreditation changes
“This will enable sophisticated investors based outside India ease of access to eligible Indian securities market products and also facilitate inflow of foreign capital”
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Sources
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