Thursday, February 16, 2012

FOREIGN INVESTORS CANNOT SQUARE OFF THEIR POSITIONS: SEBI

Though Qualified Financial Investors (QFIs) have been allowed to directly buy shares of Indian companies, the Securities and Exchange Board of India (SEBI) has put several restrictions on investments and a slew of terms and conditions for monitoring QFIs investment limits. QFIs will necessarily have to give and take delivery of shares they sell or buy. They cannot square off their positions (buy or sell) intra-day. Each transaction by a QFI shall be cleared and settled on a gross basis. There will be no netting of transactions. QFIs are not allowed to issue offshore derivatives instruments/ participatory notes. The depository participant (DP) is responsible for obtaining an
undertaking from the QFI to this effect.

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