Pursuant to the announcements made in the First Bi-monthly Monetary Policy Statement, 2014-15 dated April 1, 2014 by the Reserve Bank of India (RBI), Sebi decided change in investment conditions / restrictions for FII/QFI investments in government debt securities.
"FIIs/QFIs shall henceforth be permitted to invest only in dated government securities having residual maturity of one year or above", said Sebi. It further added, "Existing FII/QFI investments in T-Bills shall be allowed to taper off on maturity/sale. No further purchases in T-Bills shall be permitted. The investment limits vacated at the shorter end shall be available at longer maturities.
The overall Government Debt investment limit for FIIs/QFIs shall remain unchanged at US$ 30 billion".
Accordingly the FII/QFI debt investment limits are as follows:
FII/QFI debt investment limitsType of Instrument Cap (USD bn) Cap (INR crore) RemarksGovernment Debt 20 99,546 Available on demand. Eligible investors may invest only in dated securities of residual maturity of one year and above, and existing investment in Treasury Bills will be allowed to taper off on maturity/saleGovernment Debt 10 54,023 Available on demand for FIIs registered with SEBI as Sovereign Wealth Funds, Multilateral Agencies, Endowment funds, Insurance Funds, Pension Funds and Foreign Central Banks. Eligible investors may invest only in dated securities of residual maturity of one year and above.Corporate Debt 51 2,44,323 Available on demand. Eligible investors may invest in Commercial Papers only up to US$ 2 billion within the limit of US$ 51 billionTotal 81 3,97,892This circular shall come into effect immediately.
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