SEBI Extends Timeline for ODI Framework

The Securities and Exchange Board of India (SEBI) has extended the deadline for implementing its offshore derivative instruments (ODIs) framework from May 17 to November 17, 2025. This regulatory amendment aims to enhance disclosures and prevent misuse, ensuring a balanced market for Foreign Portfolio Investors (FPIs) and ODIs.

The Securities and Exchange Board of India (SEBI) has announced a timeline extension for the implementation of its new framework on offshore derivative instruments (ODIs), moving the effective date to November 17, 2025. Initially announced last December, the framework was set to become effective on May 17.

SEBI's framework includes additional disclosure requirements for ODI subscribers and Foreign Portfolio Investors (FPIs) with segregated portfolios. The move aims to curb regulatory arbitrage by prohibiting ODIs with derivatives as underlying assets and limiting hedging to non-derivative securities, thus maintaining transparency in the market.

Under the new guidelines, FPIs issuing ODIs must also secure separate registration with an 'ODI' suffix. SEBI mandates detailed ownership disclosures from ODI subscribers under specific criteria. The framework exempts some entities, including government investors and Public Retail Funds, from these new disclosure obligations.

(With inputs from agencies.)