Sebi proposes trade settlement mechanism to cut costs for offshore funds
Business Standard
Sebi proposed a new trade settlement mechanism allowing foreign investors to settle net trade values, aiming to reduce costs and attract investment.Summary
India's Securities and Exchange Board of India (Sebi) has proposed a reform to allow large foreign portfolio investors (FPIs) to settle trades based on net value rather than each individual transaction. This “netting” mechanism would offset multiple buy and sell trades, reducing costs and funding requirements for FPIs. Sebi stated the changes are intended “to enhance operational efficiency and reduce cost of funding.” The proposal arrives amid increased foreign outflows from India, influenced by factors like U.S. tariffs, corporate earnings, and equity valuations. This is part of a broader effort by the regulator to attract foreign investment by deepening the markets and streamlining registration processes.
(Source：Business Standard)