Securities and Exchange Board of India (Sebi) is set to discuss key reforms aimed at making trading easier for foreign investors and improving overall market efficiency.
At its upcoming board meeting, Sebi will consider a proposal to simplify settlement rules for foreign portfolio investors (FPIs). At present, FPIs must settle each transaction separately, even if they buy and sell shares on the same day. This often requires them to arrange large amounts of funds for multiple trades.
The proposed change would allow a “net settlement” system, where investors can offset their buy and sell positions within the same trading cycle. This means they would only need to pay or receive the net difference, reducing the need for excess funds and lowering transaction costs.
Experts say this move could ease liquidity pressure on foreign investors, especially during periods of high trading activity such as index rebalancing. It may also help cut foreign exchange costs that arise due to timing differences between inflows and outflows.
Alongside this, Sebi will also review rules related to market intermediaries, including brokers and other financial entities. The board is expected to examine governance norms and eligibility criteria, often referred to as “fit and proper” rules, to ensure stronger oversight and accountability.
These proposals are part of Sebi’s ongoing efforts to make India’s capital markets more investor-friendly while maintaining safeguards for transparency and risk management. Simplifying processes for FPIs is seen as an important step in attracting more global investment into Indian markets.
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