Home » Legal Update » FIIs allowed to invest in debt schemes for investment in the infrastructure sector

FIIs allowed to invest in debt schemes for investment in the infrastructure sector

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 372 other followers

Tags

Twitter Feed

SEBI had in August, 2011 (SEBI circular CIR/IMD/DF/14/2011 dated August 09, 2011) permitted “Qualified Foreign Investors” (QFIs) to subscribe to Mutual Fund Debt Schemes which invest in the infrastructure sector subject to a total overall ceiling of USD 3 billion within the existing ceiling of USD 25 billion. It has now been decided to carve out USD 5 billion out of the remaining USD 22 billion for FII investments in Long-term infrastructure bonds. The bonds in which investments can be made should have an initial maturity of five years or more at the time of issue and residual maturity of one year at the time of first purchase by FIIs. These investments are subject to a lock-in period of one year. FIIs can, however, trade amongst themselves but cannot sell to domestic investors during the lock-in period of one year.

The remaining USD 17 billion limit available to FIIs can be invested in Long-term infrastructure bonds which have an initial maturity of five years or more at the time of issue and residual maturity of three years at the time of first purchase by FIIs. These investments are subject to a lock-in period of three years. During the three-year lock-in period FIIs can trade amongst themselves but cannot sell to domestic investors.

Advertisements

1 Comment

  1. […] FIIs allowed to invest in debt schemes for investment in the infrastructure sector (pxvlaw.wordpress.com) […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: