SEBI working on measures to simplify market access for overseas investors
The Securities and Exchange Board of India is working on a series of measures aimed at simplifying market access for overseas investors and expanding investment opportunities in India’s capital markets, SEBI Chairman Tuhin Kanta Pandey said.
He said Sebi is working to simplify digital onboarding for persons resident outside India, widen participation by foreign portfolio investors (FPIs) in non-agricultural commodity derivatives, and introduce depository receipts against units of real estate investment trusts (REITs) and publicly listed infrastructure investment trusts (InvITs).
Pandey said the regulator’s approach going forward would centre on easier access, deeper markets and greater resilience. He said designated depository participants were already using digital workflows and application programming interface-based integration to cut FPI onboarding timelines, and that the regulator wanted such technology-led solutions adopted more widely so that “ease of access” becomes a systemic feature rather than an exception.
Sebi was consulting on net settlement of funds for mutual fund schemes in the cash market, and having established the Closing Auction Session, would now address concerns around the settlement price for derivatives on expiry days, on which a consultation paper has already been issued, he added.
“For corporate bonds, work was under way on a market-making framework covering liquidity, infrastructure and repo access, alongside consultations on Fixed Income Channel Partners to widen distribution through regulated online bond platforms, and a proposed Credit Risk-o-Meter to make credit risk easier for investors to understand,” Pandey said.
He said the Accredited Investor framework was under review, while portfolio management proposals under consideration included permitting investment in foreign securities and a framework to support global fund-management activity from India.
Depository receipts can provide investors with an avenue to gain exposure to underlying Indian assets through a separately issued security. Extending the framework to REIT and InvIT units could broaden the investor base for these instruments and create additional avenues for investment in India’s real estate and infrastructure sectors.
“Our objective is clear: reduce unnecessary friction, deepen markets and strengthen safeguards where risks are real,” Pandey said.
Pandey said the regulator’s approach going forward would centre on easier access, deeper markets and greater resilience. He said designated depository participants were already using digital workflows and application programming interface-based integration to cut FPI onboarding timelines, and that the regulator wanted such technology-led solutions adopted more widely so that “ease of access” becomes a systemic feature rather than an exception.
Sebi was consulting on net settlement of funds for mutual fund schemes in the cash market, and having established the Closing Auction Session, would now address concerns around the settlement price for derivatives on expiry days, on which a consultation paper has already been issued, he added.
Depository receipts can provide investors with an avenue to gain exposure to underlying Indian assets through a separately issued security. Extending the framework to REIT and InvIT units could broaden the investor base for these instruments and create additional avenues for investment in India’s real estate and infrastructure sectors.
