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Informist, Wednesday, Sept. 10, 2025

 

--SEBI: Easier norms for FPIs investing only in g-sec effective Feb 8 

 

MUMBAI – The relaxation of norms for foreign portfolio investors investing only in the Indian government bond market would take effect Feb. 8, the Securities and Exchange Board of India said in a circular Wednesday. In a gazette notification dated Aug. 11, the regulator had notified that relaxation of some of the regulatory compliances for foreign portfolio investors investing solely in Indian government securities would take effect in 180 days.

 

Starting Feb. 8, SEBI will exempt FPIs investing solely in government securities from adhering to investor group limits. FPIs investing only in government securities would be identified as GS-FPIs, or Government Securities-FPIs, the circular said. Such investors would only have to pay the registration fees to their designated depository participants. "The requirement of informing any change in information shall not be applicable to GS-FPIs," the circular said.  

Such investors would be subject to the provision that contributions of resident Indian individuals should be made through the liberalised remittance scheme notified by the Reserve Bank of India and should be in global funds whose exposure to Indian markets is less than 50%, the circular said. 

 

In its Aug. 11 circular, SEBI had notified removal of investment limits for non-residents, overseas citizens of India, and resident Indian individuals in an FPI. In its board meeting in June, SEBI decided to relax regulatory compliances for FPIs investing in Indian government bonds. A consultation paper on relaxing the norms for FPIs was released May 14.

 

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. 

 

The custodians and designated depository participants' standards-setting forum would create a standard operating procedure to implement the guidelines, in consultation with SEBI, the circular said.  End

 

Reported by Cassandra Carvalho

Edited by Deepshikha Bhardwaj

 

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