Sebi eases FPI norms, approves changes in rules prohibiting insider trading

The easing of FPI norms comes at a time when overseas investors have pulled out over $3 billion from the domestic markets since the Union Budget

The Securities and Exchange Board of India (Sebi) on Wednesday eased the process for on-boarding overseas investors. The market regulator also introduced an ‘informant mechanism’ to gather better evidence and crack down on insider-trading cases. The Sebi board clarified on the debt-to-equity ratio companies need to maintain to be eligible for buybacks.

Sebi said foreign portfolio investors (FPIs) would no longer be required to meet the ‘broad-basing’ criteria, under which at least 20 investors were required to establish a fund. Also, central banks that are not members of the Bank for International Settlements (BIS) will be allowed to register as FPIs.