News shortcuts: From the Courts | Top Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | Professional Updates | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax | PPE Safety Kit SITRA Approved | PPE Safety Kit
Latest Circulars »
 RBI Announces Special Open Market Operations (OMO) Simultaneous Purchase and Sale of Government of India Securities
 RBI Automation of Income Recognition, Asset Classification and Provisioning processes in banks
 Resolution Framework for COVID 19 related Stress Financial Parameters
 It is Time for Banks to Look Deeply Within: Reorienting Banking Post-Covid (Keynote Address by Shri Shaktikanta Das, Governor, Reserve Bank of India - Delivered at the Unlock BFSI 2.0 with Business Standard on Thursday, August 27, 2020)
 Submission of returns under Section 31 of the Banking Regulation Act, 1949 (AACS) Extension of time
 RBI Announces Special Open Market Operations (OMOs) of Simultaneous Purchase and Sale of Government of India Securities
 RBI Ad hoc/Short Review/Renewal of Credit Facilities
 New Definition of Micro, Small and Medium Enterprises clarifications
 Bonds in India drop as RBI minutes push out rate cut wagers
 Results of Underwriting Auctions Conducted on August 21, 2020
 Underwriting Auction for sale of Government Securities for ₹ 30,000 cr on August 21, 2020

Investment by Foreign Portfolio Investors (FPI) in Debt
January, 28th 2020

RBI/2019-20/150
A.P. (DIR Series) Circular No.18

January 23, 2020

To

All Authorised persons

Madam / Sir,

Investment by Foreign Portfolio Investors (FPI) in Debt

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to Foreign Exchange Management (Debt Instruments) Regulations, 2019 notified vide Notification No. FEMA. 396/2019-RB dated October 17, 2019, as amended from time to time, and the relevant directions issued thereunder. A reference is also invited to the A.P. (DIR Series) Circular No. 31 dated June 15, 2018 (hereinafter, Directions) read with A.P. (DIR Series) Circular No. 19 dated February 15, 2019.

2. On a review, the following changes are made to the Directions: -

a) In terms of paragraph 4(b) (i) of the Directions, short-term investments by an FPI shall not exceed 20% of the total investment of that FPI in either Central Government Securities (including Treasury Bills) or State Development Loans. This short-term investment limit is hereby increased from 20% to 30%.

b) In terms of paragraph 4(b) (ii) of the Directions, short-term investments by an FPI shall not exceed 20% of the total investment of that FPI in corporate bonds. This short-term investment limit is hereby increased from 20% to 30%.

c) FPI investments in Security Receipts are currently exempted from the short-term investment limit (paragraph 4 (b)(ii)) and the issue limit (paragraph 4(f)(iii)). These exemptions shall also extend to FPI investments in the following securities:

  1. Debt instruments issued by Asset Reconstruction Companies; and

  2. Debt instruments issued by an entity under the Corporate Insolvency Resolution Process as per the resolution plan approved by the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016

3. The updated Directions are attached.

4. These directions are issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.

Yours faithfully

(Saswat Mahapatra)
Deputy General Manager (O-i-C)

Home | About Us | Terms and Conditions | Contact Us | PPE Kit SITRA Approved | PPE Safety Kit
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting