How SEBI is making it easier for foreigners to invest
What's the story
India's market regulator, the Securities and Exchange Board of India (SEBI), is planning to simplify entry processes for foreign investors. The proposed changes include reducing documentation and scrutiny requirements, with an aim to cut down registration times from six months to just 30-60 days. This move comes amid a wave of foreign investment outflows this year due to trade tensions and muted earnings.
Regulatory changes
Proposed changes in line with global standards
The proposed changes by SEBI would include standardized documentation and reduced scrutiny for investors already regulated in other countries. The move is aimed at bringing India's registration process in line with global standards. Tuhin Kanta Pandey, chairman of India's market regulator, had said last week that they are engaging with various stakeholders to streamline "know your customer" norms across regulators.
Investment trends
Overseas investors have sold $10B worth of equities, bonds
International investors have sold a net $10 billion in Indian equities and bonds so far this year. The selling intensified in July and August due to muted corporate earnings as well as US tariff concerns. In light of these developments, top Indian regulatory officials have met more than 200 global asset managers across Europe, Asia, and US in the last five months to discuss ways to make Indian markets more accessible.
Regulatory alignment
RBI to align norms with SEBI's requirements
The Reserve Bank of India (RBI) is also set to align its norms for foreign investors with SEBI's more liberal documentation needs. This is especially true for regulated international pooled funds such as insurance and mutual funds, which are considered low-risk. The move comes after SEBI eased documentary requirements for regulated public retail funds in 2019, bringing them at par with government-owned funds.