Agencies New Delhi

Markets regulator Sebi on Wednesday decided to simplify rules and ease regulatory compliance for Foreign Portfolio Investors (FPIs) that invest exclusively in Indian government securities (G-Secs). The move is aimed at attracting more long-term bond investors to India.

Currently, foreign investors invest in Indian debt through three routes -- General, Voluntary Retention Route (VRR) and the Fully Accessible Route (FAR).VRR and FAR allow investments without many restrictions, such as security-wise or concentration limits. "With an objective to enhance ease of doing business through a risk-based approach and optimum regulation, the board approved the proposal to relax certain regulatory requirements for all existing and prospective FPIs that exclusively invest in G-Secs. These measures are expected to further help in facilitating investments by FPIs in G-Secs, " Sebi said in a statement after the conclusion of the board meeting.

This comes in the wake of increasing interest in the country's debt market through routes such as VRR and the FAR. Under the approved relaxations for FPIs investing in G-Secs, the periodicity of mandatory KYC review for such FPIs will be harmonised with RBI's requirements. Accordingly, such foreign investors will have less frequent mandatory KYC reviews.

Steps to facilitate voluntary delisting of PSUs Sebi's board on Wednesday cleared a host of proposals, including the introduction of a separate voluntary delisting framework for PSUs, where the government holds over 90% stake. 

ESOP norms relaxed Among others, the Sebi board cleared a proposal to allow startup founders, identified as promoters, to retain ESOPs granted one year before the company's IPO plan and rationalisation of the content of the QIP placement document by listed entities.

Holding shares in demat form mandatory before filing for  IPO Sebi mandates select shareholders, including directors and key managerial personnel, to hold shares in demat form before filing an IPO document, according to a statement issued by the regulator.