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September 2012

A. P. (DIR Series) Circular No. 135 dated 25th June, 2012

By Gaurang Gandhi, Chartered Accountant
Reading Time 1 mins
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Foreign investment in India by SEBI registered FIIs in Government securities and SEBI registered FIIs and QFIs in infrastructure debt.

This circular has increased the present limits for investment by FII and other foreign investors (Sovereign Wealth Funds (SWFs), Multilateral agencies, endowment funds, insurance funds, pension funds and foreign Central Banks) in Government Securities from $ 15 billion to $ 20 billion.
Conditions for investment in Infrastructure Debt Funds (IDF), within the overall limit of $ 25 billion, have been changed as under: –

  • The lock-in period for investments has been uniformly reduced to one year; and
  • The residual maturity of the instrument at the time of first purchase by an FII/eligible IDF investor must be at least fifteen months.

QFI can now invest in MF schemes that hold at least 25% of their assets (either in debt or equity or both) in the infrastructure sector, under the current $ 3 billion sub-limit for investment in mutual funds related to infrastructure.

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