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10 Apr 2015
India eases rules for foreign investment in government debt
FXStreet (Mumbai) - The Securities and Exchange Board of India (SEBI), the country's market regulator, has allowed foreign investors to reinvest in government bonds the same day, as reported by Reuters on Thursday.
India restricts the amount of government bonds available to foreign entities, and approximately 90% of the quota was filled in September last year.
Interest by foreign investors has risen significantly since the Narendra Modi government came to power in May last year, with the SEBI auctioning the remainder of the quota at frequent intervals.
However, those who had invested in government bonds before September were not able to switch those bonds without enduring the lengthy auction process.
The facility will be applicable to the entire USD30 billion ceiling on government debt purchases by foreign investors, SEBI said in an email sent to custodian banks of foreign investors.
SEBI wrote in the email, "Upon sale or redemption or maturity of government securities the FPIs (foreign portfolio investors) shall be permitted to buy government securities on the same day."
India restricts the amount of government bonds available to foreign entities, and approximately 90% of the quota was filled in September last year.
Interest by foreign investors has risen significantly since the Narendra Modi government came to power in May last year, with the SEBI auctioning the remainder of the quota at frequent intervals.
However, those who had invested in government bonds before September were not able to switch those bonds without enduring the lengthy auction process.
The facility will be applicable to the entire USD30 billion ceiling on government debt purchases by foreign investors, SEBI said in an email sent to custodian banks of foreign investors.
SEBI wrote in the email, "Upon sale or redemption or maturity of government securities the FPIs (foreign portfolio investors) shall be permitted to buy government securities on the same day."