FPIs can invest in govt bonds of 1-yr tenure under $5-billion limit
10 Oct 2014 12:20 AM GMT
Market regulator Sebi on Thursday said long -term FPIs such as sovereign wealth and foreign central bank can invest in government bonds having a minimum residual maturity of one year within $5 billion category.
'...all investments by long-term FPIs (sovereign wealth funds, multilateral agencies, endowment funds, insurance and pension funds and foreign central banks) in the $5 billion government debt limit shall continue to be made in government bonds having a minimum residual maturity of one year,' Sebi said in a circular.
The Securities and Exchange Board of India (Sebi), in July, had tweaked the investment limits for foreign portfolio investors (FPIs) in government securities by increasing the threshold for general investors from $20 billion to $25 billion. At the same time, it has reduced sub-limit for longer time FPIs such as sovereign funds by $5 billion as there was less demand in this category. The overall cap remain unchanged at $30 billion.
The previous cap of $10 billion had been utilised by only about 20 per cent in this category. The $20 billion limit for general FPIs has been always fully exhausted. FPIs are allowed to invest in the $25 billion government debt limit till the overall investment reaches 90 per cent after which the auction mechanism can be initiated for allocation of the remaining limits.
'...all investments by long-term FPIs (sovereign wealth funds, multilateral agencies, endowment funds, insurance and pension funds and foreign central banks) in the $5 billion government debt limit shall continue to be made in government bonds having a minimum residual maturity of one year,' Sebi said in a circular.
The Securities and Exchange Board of India (Sebi), in July, had tweaked the investment limits for foreign portfolio investors (FPIs) in government securities by increasing the threshold for general investors from $20 billion to $25 billion. At the same time, it has reduced sub-limit for longer time FPIs such as sovereign funds by $5 billion as there was less demand in this category. The overall cap remain unchanged at $30 billion.
The previous cap of $10 billion had been utilised by only about 20 per cent in this category. The $20 billion limit for general FPIs has been always fully exhausted. FPIs are allowed to invest in the $25 billion government debt limit till the overall investment reaches 90 per cent after which the auction mechanism can be initiated for allocation of the remaining limits.
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