The Hindu Business Line : SEBI clarification on FII investments in Govt debt

THE Securities and Exchange Board of India has clarified that foreign institutional investors' investments in the Government debt alone should be within the sub ceiling of $1.55 billion.

The FII investments in corporate debt should be within the sub-ceiling of $500 million. In order to conform to the sub-ceiling of $500 million, there should be no further investment or rollover of the existing position in corporate debt.

This is applicable for FIIs, who invest in 100 per cent debt route as well as the general 70:30 route.

Additionally, any further investment in the Government debt within the sub-ceiling of $1.55 billion may be undertaken by 100 per cent debt FIIs or their sub accounts only up to the extent of the unutilised portion of their notified limits.

The redeemed portion of the corporate debt within the limit can be utilised for investment in the Government debt only. However, those 100 per cent debt FIIs, whose holdings, as on date, are in excess of the limits allocated to them, should not undertake any fresh investment or rollover till their total holdings fall within the limits communicated to them earlier, a SEBI circular said.

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