On May 13, 2025, the Securities and Exchange Board of India (“SEBI”) released a consultation paper proposing regulatory relaxations for Foreign Portfolio Investors (“FPIs”) that invest exclusively in Indian Government Bonds (“IGBs”) under the Voluntary Retention Route (VRR) and the Fully Accessible Route (FAR) (“Proposed Framework”).[1] This category of investors is referred to as IGB-FPIs.
The proposal is part of SEBI’s ongoing efforts to enhance ease of doing business and implement a risk-based approach to regulation. The Proposed Framework aims to simplify the registration process and ease ongoing compliance obligations for IGB-FPIs, recognizing the relatively lower risk associated with investments limited to sovereign debt instruments.
SEBI has invited public comments on the proposals, which must be submitted by June 03, 2025. Market participants and stakeholders are encouraged to review the Proposed Framework and provide feedback to assist in shaping a practical and balanced regulatory framework.
[1] https://www.sebi.gov.in/reports-and-statistics/reports/may-2025/consultation-paper-on-proposal-to-facilitate-relaxation-in-regulatory-compliances-for-fpi-applicants-investing-only-in-indian-government-bonds_93906.html