India’s capital market regulator is proposing to create a new category of foreign government bond investors to attract long-term international capital, with easier rules such as exempting them from disclosing group structures.
The move comes ahead of the inclusion of Indian government bonds into the JP Morgan Global Emerging Market Bond Index on June 28, and in the FTSE Russell’s Emerging Markets Government Bond Index from September.
According to news reports, the Securities and Exchange Board of India (Sebi) announced the proposed creation of a so-called Indian government bond-foreign portfolio investors, or IGB-FPIs, category.
The regulator is also proposing to scrap the existing 50% collective cap on investment in government bonds by non-resident Indians and overseas citizens of India.
“The proposed framework would permit these investor groups to contribute freely and even hold controlling stakes,” Sebi says.