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SEBI Eases FPI Settlement, Cuts SIF Investment to Boost Market Ease

SEBI's board has approved significant measures to enhance ease of doing business in India's capital markets. Key decisions include allowing Foreign Portfolio Investors net settlement for intraday cash market transactions to reduce funding costs. The regulator also reduced the minimum investment for individual investors in Social Impact Funds to boost retail participation. Additionally, SEBI introduced a lighter compliance framework for 'inoperative' Alternative Investment Funds and eased norms for Infrastructure Investment Trusts.

Key Points: SEBI Eases FPI Norms, Reduces SIF Minimum Investment

  • Net settlement for FPI intraday trades
  • Reduced minimum investment for Social Impact Funds
  • Framework for 'inoperative' AIFs
  • Eased norms for InvITs holding SPV assets
  • Permits InvITs/REITs in liquid mutual funds
2 min read

SEBI eases FPI settlement norms, reduces minimum investment in SIF

SEBI approves net settlement for FPIs, cuts SIF investment minimum, and introduces 'inoperative funds' framework to improve ease of doing business.

"reduce liquidity pressure and cost of funding, particularly during high-volume trading events - SEBI statement"

New Delhi, March 23

Market regulator Securities and Exchange Board of India's board on Monday allowed Foreign Portfolio Investors net settlement of their funds on their intraday cash market transactions and announced other measures to improve ease of doing business.

Further, the regulator approved proposals to amend AIF Regulations to cover situations in which a scheme or an AIF can retain liquidation proceeds of portfolio post completion of its tenure.

"It has also been approved to introduce a framework for tagging certain AIFs as 'inoperative funds' with lighter compliance requirements till surrender of their registration certificate," it said to improve ease of doing business.

The relaxation for FPIs, effective December 31, 2026, aims to reduce liquidity pressure and cost of funding, particularly during high-volume trading events such as index rebalancing.

Currently, FPIs settle their transactions with custodians on a gross basis which results in additional costs for FPIs, including funding costs and foreign exchange slippages.

"Since non-outright transactions will continue to be confirmed and settled on a gross basis, concerns relating to potential market influence arising from large FPI positions or speculative trading activity are allayed," the statement said.

Further, SEBI reduced the minimum value of investment by individual investors in social impact fund SIF of Under AIF Regulations 2012 to enhance retail participation.

This would align the requirement of minimum application size for subscribing to Zero Coupon Zero Principal Instruments under SEBI Regulations with the requirement of minimum value of investment by individual investors in Social Impact Fund, the market regulator noted.

Another ease of doing business measure involved SEBI permitting InvITs to continue to hold investment in SPVs post conclusion or termination of the concession agreement.

"To provide additional investment options for temporary deployment of funds by InvITs and REITs and to mitigate concentration risk, InvITs and REITs will be permitted to invest in units of liquid mutual fund schemes where the credit risk value is at least 10," it added.

- IANS

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Reader Comments

R
Rohit P
Net settlement for FPIs from 2026? That's a long wait. While the intent to reduce their costs is good, the implementation seems delayed. Hope this doesn't discourage short-term inflows. The market needs consistent foreign investment.
A
Aditya G
Good to see SEBI focusing on ease of doing business. The 'inoperative funds' framework with lighter compliance is a practical step. It will help clean up the system without unnecessary bureaucratic hurdles for those winding down.
S
Sarah B
As someone interested in impact investing, the lower threshold for SIFs is exciting. Aligning it with other instruments makes it simpler. Now, the key will be to have transparent and well-managed funds that deliver real social impact.
V
Vikram M
The measures for InvITs and REITs allowing investment in liquid MFs is a smart risk mitigation move. Our infrastructure sector needs stable, long-term capital. These regulatory tweaks, though technical, build a stronger foundation for growth.
K
Karthik V
While these are good steps, I hope SEBI also keeps a sharp eye on enforcement. Easier norms should not lead to lax oversight. The integrity of the market is paramount for the aam investor's trust. Jai Hind!

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