Investments by FPIs in Government Securities
Summary
This circular revises the investment limits for Foreign Portfolio Investors (FPIs) in Government Securities for the July-September 2017 quarter. It establishes distinct sub-categories for State Development Loans and mandates a specific allocation ratio for future limit increases between Long-Term and General FPI categories. The document also discontinues the practice of transferring unutilized Long-Term limits to the General category while maintaining other existing terms.
Text
It has been decided to revise the limit for investment by FPIs in Government Securities, for the July - September 2017 quarter, as follows: a. Limit for FPIs in Central Government securities shall be enhanced to INR 187,700 cr. b. Limit for Long Term FPIs... in Central Government securities shall be revised to INR 54,300 cr. c. The debt limit category of State Development Loans (SDL) shall henceforth have two sub-categories... SDL-General... INR 28,500 cr while that for SDL-Long Term shall be INR 4,600 cr.
Accordingly, the revised FPI debt limits would be as follows: Government Debt – General 187,700; Government Debt – Long Term 54,300; SDL – General 28,500; SDL – Long Term 4,600; Total 275,100.
Future increases in the limit for FPI investment in Central Government securities will be allocated in the following ratio - 75% for the Long-Term category of FPIs and 25% for the General category of FPIs.
The practice of transferring unutilized limits of the Long-Term category to the General category of FPIs shall be done away with.
To harmonize the approach to FPI investments in SDLs with that for Central Government securities, future increases in SDLs would be in the ratio of 75% for SDL-Long Term and 25% for SDL-General category of FPIs.
All other existing terms and conditions, including the security-wise limits, investment of coupons being permitted outside the limits and investments being restricted to securities with a minimum residual maturity of three years, shall continue to apply.
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 Securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.