Sebi ups FIIs limit in G-Sec, T Bills

The Securities and Exchange Board of India has decided to increase the investment limit by the foreign institutional investors and their sub-accounts in government securities/Treasury Bills to $3.2 billion from the earlier level of $2.6 billion.

Written by Markets Bureau

February 1, 2008 03:17 IST

The Securities and Exchange Board of India (Sebi) has decided to increase the investment limit by the foreign institutional investors (FIIs) and their sub-accounts in government securities (G-Sec)/Treasury Bills (T-Bills) to $3.2 billion from the earlier level of $2.6 billion.

In addition, Sebi has clarified that all investments by FIIs/ Sub Accounts in debt oriented mutual fund units (including units of money market and liquid funds) shall henceforth be considered as corporate debt. In a circular to all custodians, the regulator has said there was no uniformity observed by the custodians with respect to considering investments by FIIs in debt oriented mutual funds (MFs) as debt or equity. The issue was discussed with the Reserve Bank of India which advised that the investment by FIIs and their sub-accounts in units of debt oriented mutual funds should be considered as investment in Corporate Debt. This means all exposure by by FIIs in debt oriented mutual fund would now be reckoned within the stipulated limit of US $1.5 billion limit that has been earmarked for their investments in corporate debt.

This article was first uploaded on February one, twenty eight, at seventeen minutes past three in the night.