Sebi eases compliance for foreign investors investing in government bonds — The Securities and Exchange Board of India (Sebi) has eased compliance requirements for foreign portfolio investors (FPIs) that invest exclusively in Indian government securities, showed a circular issued on Monday.
The move is aimed at simplifying the regulatory process for overseas investors in Government Securities (G-Secs), following a change by the Reserve Bank of India (RBI) that removed concentration limits for such investments under the General Route, the default regulatory pathway for overseas investors entering the country's debt market.
G-Secs are debt instruments issued by central or state governments to raise funds. For an overseas investor, these securities offer a way to gain exposure to Indian government debt without investing in shares or corporate bonds.
The Sebi circular modifies an earlier provision in its master circular governing FPIs, designated depository participants (DDPs) and eligible foreign investors. The earlier provision stated that FPIs investing exclusively in G-Secs under the Fully Accessible Route (FAR) would not be required to provide investor group details.
FAR is a mechanism that allows eligible FPIs to invest in specified Indian government securities without being subject to the usual foreign investment limits applicable to government debt. The route was introduced to make Indian G-Secs more accessible to global investors.
The Monday circular broadens the exemption. It now states that FPIs investing only in Government Securities, or G-Secs, shall not be required to furnish investor group details. This means the relaxation is no longer restricted to FPIs investing through FAR; it applies more broadly to FPIs investing only in government securities.
Investor group details are information used by regulators to identify entities that belong to the same investor group or a connected investment structure. Such information can help regulators monitor concentration and ensure that investment limits are not breached.
The requirement has become less relevant after RBI, through its 5 June 2026 circular, withdrew the prescribed concentration limit for FPIs investing in G-Secs through the General Route. With that limit removed, the markets regulator said the need to identify an investor group for an FPI investing only in G-Secs was “no longer relevant”.
“Depositories, custodians and DDPs are advised to make necessary changes in their systems to effect the changes proposed above,” said Sebi in the circular.
Apoorva is a Mumbai-based journalist at Mint who covers the Securities and Exchange Board of India (SEBI), tracking the pulse of India’s capital markets, regulatory developments and the people who operate within them. She holds a postgraduate diploma in business and financial journalism from the Asian College of Journalism, where she developed a strong foundation in markets, companies, and economic policy. She began her journalism journey with an internship at Bloomberg, where she worked across beats such as real estate, infrastructure, capital markets, and deals, which helped her understanding of business and finance.<br><br>She is guided by the belief that everything in this world can be explained in simple and fewer words, and that idea shapes how she approaches her writing. She aims to cut through complexity and present nuanced regulatory and financial developments in a way that is both accessible and meaningful to readers.<br><br>When she is not tracking market chatter, Apoorva can usually be found deep into a fiction novel or out on a long run. She is also a trained classical dancer in Bharatanatyam, Mohiniyattam, and Kathakali.
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Log in to our website to save your bookmarks. It'll just take a moment.
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.