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Sebi eases norms for FPIs to trade

The regulator has further decided to issue a consultation paper on issues regarding compensation agreement.

Mumbai: Sebi on Friday relaxed its foreign investment norms in India by allowing foreign portfolio investors to directly trade in corporate bonds without a broker and also hiked the maximum permissible foreign investment limit in stocks exchanges from 5 per cent to 15 per cent.

The Sebi board , which met in Mumbai also decided to allow employees of an issuer company to apply for shares beyond the current limit of Rs 2 lakh per employee under the employee reservation quota. Additionally it also made amendments to the Sebi Infra Investment Trust and Real Estate Investment Trust regulations making it more attractive for companies to raise capital.

As far as providing direct access to the domestic bond market is concerned, the regulator said that only category I and category II FPIs would be allowed to exercise this option.

Category I FPI includes government and government related investors such as central banks, governmental agencies, sovereign wealth funds and international or multilateral organisations or agencies. The category II FPI’s are those funds, which are broad based in nature and are well regulated in their home jurisdiction such as mutual funds, investment trusts, insurance companies, university funds and pension funds among others.

On allotment of shares under the employee reservation quota, Sebi relaxed the ICDR regulations enabling employees to bid for shares in excess of the extant limit of Rs 2 lakh per employee in the event of under-subscription in the portion reserved for employees. “The unsubscribed shares available in the employee reservation portion shall be allotted on a proportionate basis to the employees who have applied for the additional shares. Value of total allotment to an employee under the employee reservation portion, including the additional allotment shall not exceed Rs 5 lakh,” it said.

The regulator has further decided to issue a consultation paper on issues regarding compensation agreement.

( Source : Deccan Chronicle. )
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