Investment by Foreign Portfolio Investors (FPI) in Corporate Debt Securities
RBI, in consultation with Ministry of Finance proposes to permit investment by FOREIGN PORTFOLIO INVESTORS (FPIs) in unlisted debt securities and securitised debt instruments. As of now FPI are permitted to invest only in listed or to-be-listed debt securities. Investment in unlisted debt securities is permitted only in case of companies in the infrastructure sector. Further, investment by FPIs in securitised debt instruments is currently not permitted.
It has now been decided to expand the investment basket of eligible instruments for investment by FPIs under the corporate bond route to include the following:
Unlisted debt securities
FPIs can invest in the primary issues of NCD/Bonds by a public company issued in de-mat form, provided that the issuing company does not use the borrowing proceeds for real estate activities, purchase of land, investing in capital market or on- lending to other entities.
Securitised Debt Instruments
FPIs can invest in the following securitised debt instruments:
- any certificate or instrument issued by a SPV set up for securitisation of asset/s where banks, FIs or NBFCs are originators,
- any certificate or instrument issued and listed in terms of the SEBI “Regulations on Public Offer and Listing of Securitised Debt Instruments, 2008.
It has today placed on its website the draft circular implementing the proposal for comments/feedback.
Comments/feedback on the draft circular may be emailed by Wednesday, May 25, 2016.
