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By Saikat Das and Subhadip Sircar
The Securities and Exchange Board of India (Sebi) is considering a plan to ease the registration process for foreigners looking to invest in government bonds, according to its board member.
“We are actively examining if certain SEBI registration requirements can be done away with for those investors investing solely in Indian government bonds” Ananth Narayan, a whole-time member at the regulator told Bloomberg News on the sidelines of an industry conference in Mumbai.
The move comes as foreigners continue to add money into index-eligible bonds with August seeing net inflows of Rs 23,507 crore ($2.8 billion), the most since JPMorgan Chase & Co. announced last year it would include Indian bonds to its flagship emerging market gauge. India now has a 3% weight on the index, which will be ramped up to 10 per cent, the maximum possible by March 2025.
Net flows to Indian bonds have picked up as the nation’s weight in the emerging market index increases, while the end of election-related uncertainty and market expectations of a Fed rate cut next month are also helping, analysts including Nimish Prabhune and Min Dai at Morgan Stanley wrote in a note.
If sovereign wealth funds and public retail funds that are otherwise exempted from making any additional disclosures, seek to register in India, the capital market regulator is considering if it can further ease their application process, Narayan said.
In addition, the regulator has also created a dedicated cell for foreign portfolio investors, which has already reached out to over 500 investors, Narayan said. This cell will serve as a window to address any issues that may be faced by FPIs during registration, he said.
“Ensuring ease of doing investments for FPIs to draw in good quality overseas savings remains a top priority for us,” he said.