Investments by FPIs in Government and Corporate debt securities
Summary
SEBI revises the Foreign Portfolio Investor (FPI) debt investment limits for Government securities, State Development Loans, and Corporate Debt Investment Limits effective April 12, 2018. The circular enhances specific caps for Central Government securities, Long Term FPIs, and SDL categories while merging infrastructure sub-limits into the general Corporate Debt Investment Limit. Coupon investments in Government securities are now reckoned within the General limit during periodic re-setting, though immediate investment remains unconstrained.
Text
it has been decided to revise the CDIL and the limit for investment by FPIs in Government Securities and State Development Loans (SDL), for the Financial Year 2018-19
Limit for FPIs in Central Government securities shall be enhanced to INR 207,300 cr on April 12, 2018 and INR 223,300 cr on October 01, 2018 respectively from the existing limit of INR 191,300 cr
Limit for Long Term FPIs ... in Central Government securities shall be enhanced to INR 78,700 cr on April 12, 2018 and INR 92,300 cr on October 01, 2018 respectively from the existing limit of INR 65,100 cr
SDL-General shall be enhanced to INR 34,800 cr on April 12, 2018 and INR 38,100 cr on October 01, 2018 respectively from the existing limit of INR 31,500 cr
SDL-Long Term shall be revised to INR 7,100 cr
the sub-limit for investment by Long Term FPIs in the infrastructure sector shall be done away with and the existing investment and free limits shall be merged into the CDIL
The CDIL shall be enhanced to INR 266,700 cr on April 12, 2018 and INR 289,100 cr on October 01, 2018 respectively from the existing limit of INR 244,323 cr
with effect from April 12, 2018, the revised FPI debt limits shall be as follows
Investment of coupons by FPIs in Government securities ... will now be reckoned within the Government Debt – General limit
All other existing conditions with regard to allocation and monitoring of debt limits shall continue to apply
A separate notification will be issued announcing coupon reinvestment arrangements in respect of SDL and corporate debt and other changes affecting operational aspects of FPI investments in debt
This circular shall come into effect immediately. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992
Source: SecMarx — Investments by FPIs in Government and Corporate debt securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.