Investments by FPIs in Government securities
Summary
This circular announces the enhancement of Foreign Portfolio Investor (FPI) investment limits in Government securities for the period from October 2016 to January 2017. It specifies revised upper caps for Central Government securities, Long Term FPIs, and State Development Loans effective on specific dates. The document confirms that existing terms regarding security-wise limits and residual maturity requirements continue to apply.
Text
it has been decided to enhance the limit for investment by FPIs in Government Securities, for the next half year, as follows:
Limit for FPIs in Central Government securities shall be revised to INR 148,000 cr on October 03, 2016 and INR 152,000 cr on January 02, 2017 respectively.
Limit for Long Term FPIs (Sovereign Wealth Funds (SWFs), Multilateral Agencies, Endowment Funds, Insurance Funds, Pension Funds and Foreign Central Banks) in Central Government securities shall be enhanced to INR 62,000 cr and INR 68,000 cr on October 03, 2016 and January 02, 2017 respectively.
The limit for investment by all FPIs in State Development Loans (SDL) shall be enhanced to INR 17,500 cr on October 03, 2016 and INR 21,000 cr on January 02, 2017 respectively.
Accordingly, the revised FPI debt limits would be as follows: Government Debt 148,000/152,000; Government Debt – Long Term 62,000/68,000; State Development Loans 17,500/21,000; Total 227,500/241,000.
The incremental limits for Long Term FPIs shall be available for investment on tap with effect from October 03, 2016 and January 02, 2017 respectively.
The incremental limits of INR 3,500 cr each for investment by FPIs in SDLs shall be available for investment on tap with effect from October 03, 2016 and January 02, 2017 respectively.
In partial modification to Para 7 of the SEBI circular IMD/FPIC/CIR/P/2016/45 dated March 29, 2016, a separate communication will be issued with regard to transfer of unutilized limits from Government Debt – Long Term category to Government debt category.
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 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.
Custodians are requested to bring the contents of this circular to the notice of their FPI clients.
Source: SecMarx — Investments by FPIs in Government securities. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.