INDIA: SEBI Permits Investments by FPIs in Corporate Debt Securities

Friday March 3 2017

Following the issuance of RBI Circular RBI/2016-17/138 of 17 November, 2016 enhancing the list of eligible instruments for investment by FPIs under the Corporate debt route, the Securities and Exchange Board of India (SEBI) have released the SEBI (Foreign Portfolio Investors) (Second Amendment) Regulations, 2017 on 27 February 2017.

Effective from the 27 February 2017, FPIs are permitted to invest in the following:

• Unlisted corporate debt securities in the form of non-convertible debentures/bonds issued by public or private Indian companies;
• Securitised debt instruments, under:
  (i) any certificate or instrument issued by a special purpose vehicle (SPV) set up for securitisation of asset/s where banks, FIs or NBFCs are originators; or
  (ii) any certificate or instrument issued and listed in terms of the SEBI (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008.
• Investment by FPIs in the unlisted corporate debt securities and securitised debt instruments shall not exceed INR 35,000 cr within the extant Corporate debt limit which currently is INR 2,44,323 cr;
• Further, investment by FPIs in securitised debt instruments shall not be subject to the minimum 3-year residual maturity requirement; and
• All other existing terms and conditions for FPI investments in corporate debt securities shall continue to apply.

Please click on the link at the top of the page to view the Circular.

Please click on the links below for recent related articles.

RBI approves transactions by FPIs in non-convertible debentures or bonds issued by Indian companies – 03 Jan 2017

SEBI introduces changes to foreign investment rules for funds and corporate bonds – 27 Sept. 2017