Wed. Feb 1st, 2023

Regulation HK

Financial Regulator

SEBI Allows Indian Fund Managers to Serve GIFT City FPIs

1 min read

FPIs will be allowed to invest in mutual fund schemes except those categorised as “thematic”, purportedly to prevent higher volatility for entire sectors.

SEBI (Securities and Exchange Board of India) has issued a circular permitting domestic fund managers to provide management and advisory services to FPIs operating in GIFT City IFSC.

In December 2019, SEBI allowed AMCs to provide management and advisory services to appropriately regulated FPIs such as pension funds, insurance companies, banks and government-related investors.

SEBI said AMCs can now also provide management and advisory services to FPIs that do not fall under the categories specified in the December 2019 circular, provided they are regulated by IFSCA (International Financial Services Centres Authority), and subject to certain conditions.

FPIs will be allowed to invest in mutual fund schemes except those categorised as “thematic”, purportedly to prevent the sudden entry of FPIs from causing higher volatility for entire sectors.

FPIs will also not be allowed to take contra-positions in securities listed on Indian stock exchanges for six months from the date of purchase or sale of such securities.

The change to open up a previously restricted segment for AMCs is expected to boost FPI participation in Indian markets and enhance liquidity.

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