FIIsTO INVEST GOVT DEBT WITHOUT ANY AUCTION – SEBI

Relaxing the debt allocation norms for foreign institutional investors (FIIs), Sebi said such entities can invest in government securities without purchasing debt limits till the overall investment reaches 90 percent. Securities and Exchange Board of India said in a circular that once the limit is reached, the auction mechanism would be initiated for allocation of the remaining limits, as currently in place for corporate debt.

FIIs/QFIs have to purchase the debt limits through the auction mechanism conducted by Sebi. The circular, which comes into force with immediate effect, said: “It has been decided that FIIs/QFIs can now invest in government debt without purchasing debt limits till the overall investment reaches 90 percent after which the auction mechanism shall be initiated for allocation of the remaining limits, as currently in place for FII investments in corporate debt.”

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