Sebi Proposes Simplified Regulations to Attract Long-term International Bond Investors
Sebi is proposing regulatory changes to ease foreign investment exclusively in Indian government bonds (IGBs). The new category of IGB-FPIs aims to simplify compliance requirements and remove investment restrictions. Consequently, Sebi anticipates a boost in foreign investments, particularly from global bond indices, enhancing long-term capital inflow into India.
- Country:
- India
The Securities and Exchange Board of India (Sebi) has unveiled proposals aimed at simplifying regulations for foreign portfolio investors (FPIs) focused solely on Indian government bonds. By using the voluntary retention route (VRR) and fully accessible route (FAR), the initiative seeks to attract more long-term investors to India's bond market.
The proposed changes, detailed in a consultation paper, would see the creation of a new category—IGB-FPIs, exempt from several traditional compliance requirements. These include disclosures regarding investor groups and investment caps, fostering greater ease of investment in government bonds.
This regulatory shift may lead to increased foreign investments in Indian debt as global indices like JP Morgan, Bloomberg, and FTSE consider India's inclusion. Public feedback on these proposals is welcomed until June 3, 2025, as Sebi aims to bolster economic growth through strategic capital attraction.
(With inputs from agencies.)
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