Sebi proposes 'netting of funds' for FPIs

MUMBAI: Sebi on Friday proposed to put in place a process so that foreign funds can use their funds more efficiently. Sebi proposed to allow 'netting of funds' for these entities. This means a foreign portfolio investor (FPI) will be allowed to use the proceeds of sale transactions in the cash market on a particular day to fund the purchase transactions in the cash market done by it on the same day, thereby requiring the FPI to fulfil only the net fund obligation.

Currently, an FPI has to meet each leg of the transaction separately. So, if an FPI has bought shares worth Rs 100 crore and sold shares worth Rs 90 crore, it has to transfer Rs 100 crore and also the shares worth Rs 90 crore.