SEBI Board Meeting Results: FPI Rules Revised

In its board meeting on Tuesday, the Securities and Exchange Board of India (SEBI) took some major decisions including easing foreign fund and ownership rules. No decision was taken on extending trading hours as the Indian exchanges are yet to confirm it. The proposal was to extend the current operating hours (9:15 am to 3:30 pm) further to align domestic markets with global counterparts.

In the press meet post the meeting, chairman Ajay Tyagi said that:

• The regulator will be issuing a revised circular on fund ownership for Foreign Portfolio Investors (FPI).
• FPI registration with the regulator to include a common application.
• Mutual fund expenses to be reduced based on economies of scale.
• 25 percent of the borrowing requirements of the corporates will be met via the bond market on a pilot project basis for the first two years.
• FPIs will be allowed to deal in all commodities derivatives traded on Indian stock exchanges except those classified as sensitive.
• Interoperability among multiple clearing corporations introduced.
• Consent mechanism was relaxed to include only serious cases. Confidentiality clause was also introduced.