Sebi has announced that FIIs/QFIs shall hereafter be permitted to invest in Government Debt without purchasing debt limits till the overall investment reaches 90%. Once this 90% limit is reached, auction mechanism shall be initiated for allocation of the remaining limits, as currently in place for FII investments in Corporate Debt.
SEBI has decided that all FIIs/ sub-accounts may avail limits in the Corporate Debt - Long Term Infra category without obtaining SEBI approval till the overall FII investments reaches 90%, after which the auction mechanism shall be initiated for allocation of remaining limits.
Similarly, SEBI later decided that FIIs can invest in Corporate Debt without purchasing debt limits till the overall investment reaches 90% after which the auction mechanism shall be initiated for allocation of the remaining limits.
It has been decided to extend the allocation mechanism, as presently applicable for corporate debt securities, to FII/QFI investment in Government debt securities also.
It was further stated that consequent to the changes as above, the facility of re-investment provided as well as the restrictions on re-investment as given in the SEBI circulars shall no longer apply in respect of limits held/investments made by FIIs in the Government Debt category, till the limits are available on tap. Meanwhile, those FIIs which had obtained Government Debt limits in the debt limit auctions held on 20 August 2013, the time period for utilization of limits allocated through the bidding process shall be in terms of the SEBI circular dated 31 July 2013.
Sebi on 12 September had done away with the requirements for obtaining photo identities, address proofs or any other documentary requirements of the beneficial owner, senior management personnel and authorised signatories for entities which are government-related or those regulated in other jurisdictions. Sebi also highlighted in a separate press release that intermediaries can rely on third-party due-diligence in verifying the records of the identity of clients.
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