Sebi relaxes norms for infrastructure debt funds

IDFs can invest funds collected for their schemes in bonds of public financial institutions and infrastructure finance companies

Market regulator Sebi today relaxed norms for long term foreign investors eligible to put money into Infrastructure Debt Fund (IDF), as part of efforts to attract more overseas investments into the country.

IDFs, which can be set up like mutual funds, can invest funds collected for their schemes in bonds of public financial institutions and infrastructure finance companies.

There are two types of IDFs, one is that operate as mutual funds and are regulated by Sebi and others that operate as non-banking financial companies (NBFCs) and supervised by the Reserve Bank.

Now, foreign feeder funds -- that have at least 20% of their assets under management being managed by certain class of long term overseas investors, would be allowed to invest in IDFs.

The list of such long term investors comprise foreign central banks, government agencies, sovereign wealth funds, international/multilateral organisations/agencies, insurance funds and pension funds, according to Securities and Exchange Board of India (Sebi).

Feeder funds are domestic mutual funds that invest in overseas mutual funds, while the global funds, in turn, invest in firms in their respective markets.