- Change in Conditions FPI investments in Govt Debt Securities
SEBI has vide its circular CIR/IMD/FIIC/2/2015 dated 5th February, 2015 announced that investment of coupons in Government securities will be enabled even when the existing limits for FPIs are fully utilised.
FPIs shall be permitted to invest in Government securities, the coupons received on their investments in Government securities. Such investments shall be kept outside the applicable limit (currently USD 30 billion) for investments by FPIs in Government securities.
For the purpose of investment of coupons, the FPIs shall have an investment period of 5 working days from the date of receipt of the coupon. A re-investment facility of 5 working days shall be provided on the Government securities that have been purchased by utilizing the coupons. The coupons invested in purchasing Government securities shall be classified into a separate investment category which is over and above the USD 30 billion Government debt limit.
- Change in investment conditions / restrictions for FPI investments in Corporate Debt Securities:
SEBI has vide its CIR/IMD/FIIC/1/2015 dated 3th February, 2015 announced that all future investments within the USD 51 billion Corporate Debt limit category, including the limits vacated when the current investment by an FPI runs off either through sale or redemption, shall be required to be made in corporate bonds with a minimum residual maturity of three years.Further, FPIs shall not be permitted to invest in liquid and money market mutual fund schemes. There will, however, be no lock-in period and FPIs shall be free to sell the securities (including those that are presently held with less than three years residual maturity) to domestic investors.