Sebi eases MF investment norms for QFIs

Policy push to infrastructure sector

Market regulator Sebi has relaxed investment norms for qualified foreign investors (QFIs) allowing them to invest in mutual fund schemes with atleast 25 per cent of their assets either in debt or equity of the infrastructure sector.

“QFIs can now invest in those debt mutual fund schemes that hold atleast 25 per cent of their assets (either in debt or equity or both) in the infrastructure sector under the US$3 billion investment limit of debt mutual fund schemes which invest in infrastructure,” Sebi said.

Debt exposure

Earlier, QFIs were allowed to invest in mutual fund schemes with debt exposure only. It also said that prior approval of the regulator is not required if the investment is less than 90 per cent of the specified ceiling.

“QFI can invest without obtaining approval till the overall QFI investments reaches 90 per cent of US$3 billion that is US$2.7 billion,” Sebi said.

Besides, the regulator said, it has been decided, that the term ‘person’ and the phrase ‘resident in India’ shall carry the same meaning as defined under the Income Tax Act, 1961, in consultation with government and Reserve Bank of India.
“QFI would mean a person who is a resident in a country that is a member of Financial Action Task Force (FATF), resident in a country that is a signatory to IOSCO (International Organisation of Securities Commissions) or a signatory of a bilateral MoU with Sebi,” it said.

Sebi said the circular was issued to protect the interests of the investors in securities and to promote the development and regulate the securities market.