Regulatory Alerts2024-12-17
SEBI Measures to Address Regulatory Arbitrage with Respect to Offshore Derivative Instruments and FPIs with Segregated Portfolios
The Securities and Exchange Board of India (SEBI) has modified the FPI Master Circular to mandate separate dedicated registrations for Foreign Portfolio Investors issuing Offshore Derivative Instruments and to impose strict hedging requirements. The regulator introduced granular disclosure obligations for ODI subscribers exceeding specific equity thresholds or concentration limits, while providing exemptions for government entities and regulated pooled investment vehicles. These measures aim to eliminate regulatory arbitrage by ensuring transparent ownership tracking and aligning ODI regulations with domestic FPI rules, with phased implementation timelines for compliance.
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