SEBI eases bond market investment norms for QFIs

India Infoline News Service | Mumbai |

The move would also allow the QFIs to invest in the 'to be listed' corporate debt securities being issued directly by the companies

Capital market regulator SEBI (Securities and Exchange Board of India) has relaxed the bond market investment norms for qualified foreign investors (QFIs) by allowing them to directly purchase the corporate debt securities that companies intend to list on stock exchanges.

The objective is to increase the overseas fund flow into Indian bond markets. The move would also allow the QFIs to invest in the 'to be listed' corporate debt securities being issued directly by the companies.

Till now, QFIs—a category of foreign investors—have been allowed to either invest in the corporate debt securities that are either already listed, or those being sold through a public offer.

In July 18, 2012, QFIs had been allowed to invest in listed / to be listed Indian corporate debt securities through public issues and units of debt schemes of Indian mutual funds.

Based on the feedback received from market participants, and to align the eligibility criteria for investment in debt securities between SEBI and RBI, and to bring QFI and FII at par for investment in “to be listed” debt securities, it has now been decided to allow QFIs to invest in “to be listed” corporate debt securities directly from the issuer, SEBI said in a notification on Tuesday.

In the circumstance that the debt issue cannot be listed within 15 days of issue for any reasons whatsoever, then the holding of the QFI shall be sold off only to domestic participants / investors until the securities are listed, it added.


 

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