Govt To Hike Fii Investment Cap, Allow Margin Trade

An increase in the 49 per cent ceiling on investment in Indian companies by foreign institutional investors (FIIs), introduction of margin trading on the bourses and relaxation in the norms for acquisition of shares by promoters of Indian corporates are among the slew of measures to be announced in the next few days by the Union government to boost market sentiments.

Other measures to be unveiled include strengthening of the board of market regulator, Securities and Exchange Board of India (Sebi), and an early resolution of the dispute over payment of fees by brokers to Sebi.

The measures are being finalised in the wake of last week's US developments casting their shadow on the Indian markets and the rapidly declining interest of FIIs in India. The objective is to revive investors' interest and confidence in the Indian stock market and provide for additional liquidity into the system.

The decision to implement these measures was taken at a high-level meeting convened here today by finance minister Yashwant Sinha to assess the impact of the recent US developments on the Indian markets and the economy. The meeting lasted for more than an hour and was attended by the finance ministry brass. Official sources told Business Standard that modalities of these decisions were still being worked out and would be finalised in the next few days.

Since Parliament was not in session, an ordinance would also have to be promulgated to bring about the changes in Sebi