Market regulator Sebi today proposed uniform guidelines for all classes of foreign investors, a step aimed at simplifying the investment process for overseas entities and strengthen surveillance over them.
At its board meeting held here, the Securities Exchange Board of India (Sebi) decided to prepare draft guidelines in this regard with an aim to make uniform rules for different classes of foreign investors such as FIIs, NRIs, Foreign Venture Capital Investors (FVCIs) and QFIs (Qualified Financial Investors).
“With a view to rationalise/harmonise different routes for foreign portfolio investments, the Sebi will prepare draft guidelines based on the guidance of the Working Group on Foreign Investment in India (WGFII), for consideration of the Government so that uniform guidelines are made for various categories of investors such as FII, FVCI, NRI, QFI etc,” the Sebi said in a statement after the board meeting.
The Sebi also relaxed its rules regarding the debt limit allocation mechanism for FIIs (Foreign Institutional Investors), which have emerged as a significant force to the Indian capital market over the years.
The regulator said that “with effect from January 1, 2014, the FIIs shall be allowed to re-invest during the calendar year to the extent of 50 per cent of their debt holdings at the end of the previous calendar year.”
“The utilisation period for government debt and corporate debt limits will be reduced to 30 days and 60 days, respectively,” the Sebi said.
Within the FII debt limit, the Sebi said, the unutilised limit in respect of corporate debt infra long term bonds category may be availed by the FIIs/Sub Accounts without obtaining prior Sebi approval till the overall FII investments reaches 90 per cent of the limit.
Thereafter, the auction mechanism shall be initiated for allocation of remaining limits, the Sebi said.