The FPIs would be allowed to invest across a host of the capital market segments, including in shares, debentures, warrants, mutual funds, collective investment schemes, derivatives, treasury bills and government securities.
Besides, they can also invest in the commercial papers, security receipts of asset reconstruction companies, perpetual debt instruments, non-convertible debentures, infrastructure debt funds and Indian Depository Receipts.
However, one FPI can hold a maximum of 10% equity shares in a company, subject to the applicable sectoral caps.
Under the proposed FPI Regulations, which were approved by Sebi's board on Saturday and would be notified soon, various investor classes like FIIs (Foreign Institutional Investors) and QFIs (Qualified Foreign Investors) would be clubbed into one single category to be known as FPIs.
To make it easier for FPIs to invest in Indian markets, the new norms also provide for a permanent registration to them, while Sebi has also exempted the lowest-risk foreign investors (such as government entities, sovereign funds and multilateral agencies) from any registration fees.
The new norms come at a time when concerns are being raised about flight of overseas funds away from Indian markets, which was known as among the most attractive investment destinations across the world till a few years ago. The regulations have been streamlined to make Indian market a more attractive investment destination.