Sebi Revolutionizes Investment: Foreign Portfolio Investors Gain New Settlement Option

Sebi has announced a net settlement option for foreign portfolio investors (FPIs) to improve efficiency and lower funding costs. Additionally, the policy includes amendments to Alternative Investment Funds (AIFs), reducing minimum investment values to boost participation and streamlining processes for inoperative funds.

The Securities and Exchange Board of India (Sebi) has decided to allow foreign portfolio investors (FPIs) to net funds for same-day cash market trades. This move is intended to improve operational efficiency and reduce funding costs, particularly during index rebalancing days. The new policy is set for implementation by December 31, 2026.

In other developments, Sebi has approved significant amendments to the Alternative Investment Funds (AIFs) norms. Notably, the minimum investment required for each investor in the Social Impact Fund of AIFs has been lowered to Rs 1,000 from Rs 2 lakh, a strategy aimed at increasing retail participation.

Moreover, AIFs will now have the flexibility to retain funds beyond the scheme's life, facilitating a smoother winding-up process. The new regulations address concerns related to taxes or litigation and aim to decrease the compliance burden on inactive funds.

(With inputs from agencies.)