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Informist, Wednesday, Jun. 18, 2025

 

--SEBI relaxes norms for FPIs investing only in G-secs 

 

MUMBAI – The Securities and Exchange Board of India Wednesday relaxed regulatory compliances for foreign portfolio investors investing solely in Indian government securities, the regulator said in a press release Wednesday. A consultation paper on relaxing the norms for FPIs was released May 14.

 

Accordingly, FPIs investing in gilts through the fully accessible route will not be required to disclose details of affiliations with investor groups. The requirement is more relevant for monitoring FPI exposures to equities and corporate bonds, SEBI said.

 

According to data from Clearing Corp. of India at 2025 IST, FPIs owned government bonds worth INR 2.70 trillion through the fully accessible route. The relaxation in FPI norms in gilts has been made to facilitate the ease of doing business, SEBI said.

 

The review of know-your-customer details for government bond investors by their custodians was also relaxed in line with Reserve Bank of India timelines. This would mean FPIs will now have to furnish KYC requirements in two, eight, and 10 years, rather than in accordance with SEBI's one- or three-year mandate, based on risk assessment, as was mentioned in SEBI's draft paper.

 

SEBI also removed the investment limits for non-residents, overseas citizens of India, and resident Indian individuals in an FPI, including in control of an "IGB-FPI", or Indian Government Bond-FPI. The requirements for resident Indians to contribute through the liberalised remittance scheme and in global funds whose Indian exposure is less than 50% shall continue to apply, the regulator said. 

 

SEBI also revised the period for FPIs' disclosure of material changes in information and submission of supporting documents to 30 days for all changes, it said. The previous period of disclosure period was seven working days and 30 days from the date of change for Type I and Type II changes.

 

SEBI said it would continue to specify, from time to time, the conditions for identification as a "GS-FPI", or Government Securities-FPI, at the time of onboarding and transition of existing as well as prospective FPIs to "GS-FPI" status and vice-versa, it said.  End

 

Reported by Srijita Bose

Edited by Rajeev Pai

 

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