INDIA: 2013-2014 Budget brings changes to India foreign investment regime

Thursday February 28 2013

Due to changes to India foreign investment regime, finance Minister P Chidambaram on Thursday has announced that procedures for overseas investors will be simplified.

Presenting the Union Budget for 2013/2014, he announced that Sebi will simplify the procedure for the Foreign Portfolio Investors and prescribe uniform registration and other norms by converging the different Know Your Customer (KYC) norms.

According to the Finance Minister, depository participants will now register different classes of portfolio investors provided they comply with the KYC guidelines.

Market regulator Securities and Exchange Board of India (Sebi) would be doing away with different procedures and avenues for many categories.

Further, Foreign Institutional Investors (FIIs) would be permitted to participate in exchange traded currency derivatives segments. Their limit would be to the extent of their Indian rupee exposure in the country.

FIIs will also be permitted to use their investments in corporate bonds and government securities as collateral to meet their margin requirements.

The full text of the Finance Minister`s speech can be found at the above link.