Offshore derivatives: Sebi eases guidelines for hedging instruments

The Securities and Exchange Board of India (Sebi) on Tuesday issued operating guidelines for overseas investors, largely in line with the recommendations in the HR Khan Committee report. 

The regulator has eased conditions for hedging offshore derivative instruments (ODIs), allowing foreign portfolio investors (FPIs) to issue these instruments with derivatives as underlying if they take up separate registration specifically for ODI issuances. 

The eligibility norms for NRIs/OCIs, however, have been retained according to the erstwhile circular. Earlier, ODI issuers were co-mingling their proprietary and hedging positions, and it was difficult to establish one-to-one linkage, said experts. 

The norms say FPIs won’t be allowed