On Tuesday, the market watchdog SEBI lifted its limit of 20% on investments by FPIs or foreign portfolio investors in corporate bonds. The regulator in a notification said the restriction has been done away with in accordance with a circular notified by the Reserve Bank of India.
Last year in June, the Securities and Exchange Board of India (SEBI) has made it mandatory for foreign portfolio investors to not hold over 20% of their corporate bond portfolio in a single corporate.
Nonetheless, given the feedback from the market, the central bank withdrew the restriction. And to hence implement the guidelines stipulated by the RBI, SEBI said provisions laid down in its June 2018 circulars concerning exposure of over 20% in corporate bonds “stands withdrawn with immediate effect”.
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