Investment by FPIs in securitised debt instruments

By Anita Baid,(anita@vinodkothari.com)(finserv@vinodkothari.com)

Investments by Foreign Portfolio Investors (FPIs) in unlisted debentures and securitised debt instruments (SDIs) issued by Indian companies was allowed pursuant to SEBI notification dated 27th February, 2017[1]. Earlier in November, 2016, Reserve Bank of India (RBI) had also permitted investment by FPIs in unlisted non-convertible debentures and securitised debt instruments issued by Indian companies[2]. The said amendments by the securities market regulator and financial services regulator were the final push which was needed to encourage more FPI investments in India.

Previously, FPIs could invest only in debt securities of companies engaged in infrastructure sector. This was a clear indication that the government aimed to develop the infrastructure sector in India. But eventually, it seemed that the government did not want to restrict this to infrastructure only and wanted to reap all the benefits for developing a dynamic and facilitating bond market in the country.

Economic development and smooth flow of funds into the economy are the twin sides of the same coin and the government of India has very well taken this into account while amending the FPI regulation. Allowing FPI investments in unlisted debt instruments of Indian companies, was a step by the government to relax the burden which the companies had to bear, while raising funds in form of equity. The regulation  in turn blocked the companies from taping into fresh funds and listing of debt instruments, which called for additional burden of complying with a host of other regulations.

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FDI in financial services sector: restrictions brought back but for unregulated entities

RBI’s First Monetary Policy for FY 2018-19

Anita Baid

finserv@vinodkothari.com

 

The Reserve Bank of India (RBI) released its first monetary policy statement for FY 2018-19 on April 05, 2018[1] (‘Policy Statement’). The aforesaid statement sets out various developmental and regulatory policy measures for the financial sector. It aims at strengthening regulation and supervision; broadening and deepening financial markets; improving currency management; promoting financial inclusion and literacy; and, facilitating data management. Some of the major issues from the Policy Statement have been discussed herein below: Read more

Cross border mergers will soon be reality

RBI notifies FEMA regulations for inbound & outbound mergers By CS Vinita Nair corplaw@vinodkothari.com The Reserve Bank of India (‘RBI’) on April 28, 2017 proposed draft of Foreign Exchange Management (Cross Border Merger) Regulations, 2017[1] which covered regulations in relation to merger, demerger, amalgamation or arrangements between Indian company (ies) and foreign company[2] (ies). These regulations were […]

Cracking the ‘Bitcoin’ nut this Budget Session

Vallari Dubey & Saloni Mathur

finserv@vinodkothari.com
corplaw@vinodkothari.com

Introduction

In the words of Mr. Nassim Nicolas Talib, “Bitcoin is the beginning of something great, a currency without a government, something necessary and imperative.” Read more