SEBI introduces new rules for FPI settlement
SEBI introduced new rules allowing FPIs net settlement of intraday trades and eased regulations for AIFs to improve business practices.Summary
The Securities and Exchange Board of India (SEBI) has announced new regulations aimed at improving ease of doing business and reducing costs for Foreign Portfolio Investors (FPIs). The key change allows FPIs to net settle their funds on intraday cash market transactions, effective December 31, 2026, which is expected to reduce liquidity pressure and funding costs, especially during high-volume trading. Currently, FPIs settle transactions on a gross basis, incurring additional expenses. SEBI clarified that non-outright transactions will still be settled gross to prevent market manipulation.
Additionally, SEBI approved amendments to the Alternative Investment Fund (AIF) Regulations, allowing schemes to retain liquidation proceeds post-tenure and introducing a framework for tagging 'inoperative funds' with reduced compliance requirements. The minimum investment value for individual investors in Social Impact Funds (SIFs) under AIF Regulations 2012 was also reduced to encourage greater retail participation.
Finally, SEBI permitted Infrastructure Investment Trusts (InvITs) to continue holding investments in Special Purpose Vehicles (SPVs) even after the concession agreement concludes or terminates, further streamlining investment processes.
(Source：The Hans India)