Change in investment conditions / restrictions for FII/QFI investments in government debt securities - SEBI - CIR/IMD/FIIC/8/2014

CIRCULAR CIR/IMD/FIIC/8/2014 April 07, 2014 To All Foreign Institutional Investors through their designated Custodians of Securities The Depositories (NSDL and CDSL) Sir / Madam, Sub: Change in investment conditions / restrictions for FII/QFI investments in government debt securities 1. 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), it has been decided as follows: 2. FIIs/QFIs shall henceforth be permitted to invest only in dated government securities having residual maturity of one year or above. 3. 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. 4. The overall Government Debt investment limit for FIIs/QFIs shall remain unchanged at US$ 30 billion. 5. Accordingly the FII/QFI debt investment limits are as follows: S. No. Type of Instrument Cap (USD bn) Cap (INR Crore) Remarks 1. Government 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/sale 2. Government 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. 3 Corporate Debt 51 244,323 Available on demand. Eligible investors may invest in Commercial Papers only up to US$ 2 billion within the limit of US$ 51 billion Total 81 397,892 This circular shall come into effect immediately. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992. A copy of this circular is available at the web page Circulars on our website www.sebi.gov.in . Custodians are requested to bring the contents of this circular to the notice of their FII clients. Yours faithfully, S MADHUSUDHANAN Deputy General Manager Tel No.: 022-26449614 Email: [email protected]