Investment by Foreign Portfolio Investors (FPI) in Debt – Review

RBI through its notification dated 27 April 2018, announced certain changes affecting operational aspects of FPI investments in debt, in consultation with SEBI.  Some of the key changes are-

  • The minimum residual maturity requirement of 3 years for Central Government securities and State Development Loans categories stands withdrawn.
  • FPIs are permitted to invest in corporate bonds with minimum residual maturity of above 1 year.
  • FPIs are permitted to invest in treasury bills issued by the Central Government.
  • At any point in time, all securities with residual maturity of less than 1 year will be reckoned for the 20% limit, regardless of the maturity of the security at the time of purchase by the FPI.

May 1st, 2018

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