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Sebi eases investment norms for FIIs

Press Trust of India


Thursday, October 16, 2008 (Mumbai)

Mumbai, Oct 16 (PTI) With the foreign institutional investors pulling out of stock market, SEBI
today removed the conditions limiting FIIs' allocation of funds between debt and equity, a
decision that will provide greater flexibility and investment options to overseas investors.

"It has been decided to do away with the conditions provided in ...FII regulations pertaining to
restrictions of 70:30 ratio of investment in equity and debt respectively, with immediate effect,"
the market regulator said in a circular here.

The relaxation, according to SEBI, is aimed at according "greater flexibility to the FIIs to allocate
investments across equity and debt".

"It will have a two-way positive impact. This will enable FIIs to invest without any obligation and
will also enable Indian companies to get more funds for their expansion plans", said
Jagannadham Thunuguntla, equity head Nexgen Capital.

The move comes a day after government doubled the limit of FII investment in corporate debts
to USD 6 billion.

Finance Minister P Chidambaram yesterday said "Sebi had informed me that it would address
any request for relaxation in the proportion of investment in equity and debt required to be
maintained by an FII under current regulations."