Sebi Eases Rules for Foreign Investors

The Securities and Exchange Board of India (Sebi) is scheduled to discuss several new proposals at its upcoming board meeting. A significant proposal aims to allow foreign portfolio investors (FPIs) to settle their cash market trades on a net basis, rather than the current gross transaction method. This change is intended to reduce costs and potentially boost foreign investment, especially following recent record outflows from Indian markets.

Sebi is also reportedly reviewing the 'fit and proper' criteria for market intermediaries, including stockbrokers. This review is expected to address disqualification norms for key managerial persons and directors. Currently, individuals in critical roles can face automatic disqualification upon the filing of an FIR or charge sheet in economic offense cases. The proposed change would move towards disqualification only upon conviction, offering relief to executives facing unproven allegations.

Furthermore, the regulator plans to streamline rules for alternative investment funds (AIFs) wishing to wind up schemes and surrender their registration. This move is designed to assist funds that have been hampered by unresolved legal or tax issues.

Other discussions may include proposals concerning Infrastructure Investment Trusts (InvITs), such as allowing them to retain SPV investments post-concession period and permitting privately listed InvITs to invest in greenfield projects. Sebi might also consider reducing the minimum investment in social impact funds to ₹1,000, aiming to attract smaller investors.