SEBI eases norms for FIIs

Press Trust of India

MUMBAI, Oct. 16: With the foreign institutional investors (FIIs) pulling out of Indian stock
markets, the Securities and Exchange Board of India (Sebi) today removed the conditions
limiting foreign institutional investors' allocation of funds between debt and equity, a decision
that will provide greater flexibility and investment options to overseas investors.
“It has been decided to do away with the conditions provided in ...FII regulations pertaining to
restrictions of 70:30 ratio of investment in equity and debt respectively, with immediate effect,”
the market regulator said in a circular here.
The relaxation, according to Sebi, is aimed at according “greater flexibility to the FIIs to allocate
investments across equity and debt”.
“It will have a two-way positive impact. This will enable FIIs to invest without any obligation
and will also enable Indian companies to get more funds for their expansion plans”, said Mr
Jagannadham Thunuguntla, equity head of Nexgen Capital.
The move comes a day after the government doubled the limit of FII investment in corporate
debts to $6 billion.
The Union finance minister, Mr P Chidambaram yesterday said: “Sebi had informed me that it
would address any request for relaxation in the proportion of investment in equity and debt
required to be maintained by an FII under current regulations.”