SEBI Eases Norms for FPIs and Social Impact Funds
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Social Impact Funds: BEFORE, retail investors needed a minimum of Rs 2 lakh to invest in SIFs. NOW, the threshold is sharply reduced to Rs 1,000 to align with Zero Coupon Zero Principal (ZCZP) instruments and boost retail participation.
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FPI Settlement: BEFORE, FPIs had to separately fund purchases and deliver securities for sale. NOW, they are permitted to use net settlement of funds in the cash market, offsetting buy and sell transactions within the same cycle to reduce funding costs.
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AIF Liquidation: BEFORE, AIFs had to achieve a zero bank balance and distribute proceeds within their fund life. NOW, they can retain liquidation proceeds post-tenure for pending litigations or tax demands and seek an 'inoperative' status with lighter compliance requirements.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)Which of the following statements is/are correct regarding the reforms approved in the 213th SEBI Board meeting? 1. The minimum investment threshold for retail investors in Social Impact Funds was increased from Rs 1,000 to Rs 2 lakh. 2. Foreign Portfolio Investors (FPIs) are now permitted to use net settlement of funds in the cash market.