Foreign Portfolio Investors (FPIs) shall not be permitted to invest in liquid and money market mutual fund schemes – SEBI

CIRCULAR 

CIR/IMD/FIIC/1/2015

February
03, 2015
 

To

All Foreign
Portfolio Investors

 

through
their designated Custodians of Securities

 

The
Depositories (NSDL and CDSL)

 

Sir / Madam,

 

Sub: Change in
investment conditions / restrictions for FPI investments in Corporate Debt
securities

 

1.      
Pursuant to the announcements made in the Sixth
Bi-monthly Monetary Policy Statement, 2014-15 dated February 03, 2015 by the
Reserve Bank of India (RBI), it has been decided as follows:

 

2.      
All future investments within the USD 51 bn
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.

 

3.      
Furthermore, FPIs shall not be permitted to
invest in liquid and money market mutual fund schemes.

 

4.      
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.

 

This circular shall come into effect immediately. This circular is
issued in exercise of powers conferred under Section 11 (1) of the Securities
and Exchange Board of India Act, 1992.

 

A copy of
this circular is available at the web page “Circulars” on our website
www.sebi.gov.in.

 

Custodians
are requested to bring the contents of this circular to the notice of their FPI
clients.

 

Yours faithfully,

 

 

S
MADHUSUDHANAN

Deputy
General Manager

 Tel No.:
022-26449614

 Email:
smadhu@sebi.gov.in

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