Sebi Cracks Down: Rs 50 Lakh Fines for FPI Short-Term Investment Breaches

Sebi has imposed Rs 50 lakh in penalties on three foreign portfolio investors, including Nexpact Ltd, AIRD Investment Commercial LLC, and Aviator Global Investment Fund, for violating short-term debt security investment limits. The infractions were notable over multiple periods, highlighting ongoing compliance issues.

In a significant regulatory move, the Securities and Exchange Board of India (Sebi) has levied a cumulative fine of Rs 50 lakh on three foreign portfolio investors. The decision was made in response to breaches of the permissible limits on short-term investments in debt securities.

Nexpact Ltd and AIRD Investment Commercial LLC each faced penalties of Rs 20 lakh, while Aviator Global Investment Fund was fined Rs 10 lakh. The penalties follow inspections of Orbis Financial Corporation's custodial practices for the fiscal year 2022.

Sebi's investigation extended from April 2018 to November 2023, uncovering that these entities consistently exceeded the permissible 30 percent short-term investment threshold set by the Reserve Bank of India. The persistent violations underscore the need for stringent adherence to regulatory norms among foreign portfolio investors.