SEBI plans to ease registration for foreigners buying govt debt

The Securities and Exchange Board of India was created as a non-statutory body on April 12, 1988, by a resolution passed by the Indian government. In 1992, the Securities and Exchange Board of India became a statutory body, and on January 30, 1992, the Securities and Exchange Board of India Act, 1992 (15 of 1992) went into effect. “To safeguard the interests of investors in securities and to promote the development and regulation of the securities market and for matters connected therewith or incidental thereto” is how the Securities and Exchange Board of India defines its primary functions in its Preamble.

Foreign investors with net inflows of Rs. 23507 crore:

A board member of the Securities and Exchange Board of India (Sebi) has revealed that the organisation is devising a scheme to streamline the registration procedure for foreign investors wishing to purchase government bonds. “We are actively examining if certain SEBI registration requirements can be done away with for those investors investing solely in Indian government bonds” Ananth Narayan, a whole-time member at the regulator, said Bloomberg News on the sidelines of an industry conference in Mumbai.

Currently weighted at 3%, India’s share of the index will increase to a maximum of 10% by March 2025. The decision is being made as foreign investors keep flooding index-eligible bonds with cash; in August, net inflows of $2.8 billion were recorded, the highest since JPMorgan Chase & Co. said last year that it would be adding Indian bonds to its flagship emerging market gauge. According to a note from Morgan Stanley analysts Nimish Prabhune and Min Dai, net flows to Indian bonds have increased as the country’s weight in the emerging market index rises. The end of election-related uncertainty and market expectations of a Fed rate cut next month are also helping.

According to Narayan, the capital market regulator is considering further streamlining the application process for public retail funds and sovereign wealth funds, which are already exempt from making any additional disclosures, in order to facilitate their registration in India.

Dedicated FPI cell:

According to Narayan, the regulator’s special cell for foreign portfolio investors has already gotten in touch with over 500 investors. According to him, this cell will act as a conduit for any problems that FPIs might run into when registering.

He declared, “Our top priority continues to be making it easy for FPIs to make investments and pull in high-quality overseas savings.”

Conclusion: The SEBI board made a wise decision by easing investment restrictions for foreign nationals.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.