India Allows NRIs to Fully Invest in GIFT City Funds
India Opens GIFT City Funds to NRI Investments
India’s market regulator, the Securities and Exchange Board of India (SEBI), announced that foreign funds in GIFT City, Gujarat, can now accept full investments from Non-Resident Indians (NRIs) and other Indian-origin citizens. This new rule is expected to bring more global capital into the region.
Detailed Disclosure Requirements
Funds will need to make detailed disclosures if they hold more than 33% of their equity assets in a single Indian group. The same applies if a fund and its investor group together hold over 250 billion rupees ($3 billion) in the Indian markets. These disclosures include submitting identity documents like passports or permanent account numbers (PAN) to SEBI or following the guidelines set by the International Financial Services Regulatory Authority (IFSRA).
Promoting GIFT City as a Financial Hub
The Indian government is promoting GIFT City as a major hub for global capital and financial services. Over the past three years, more than 80 fund managers have committed $30 billion and invested over $2.93 billion in GIFT City, showing its growing importance.
New Rules to Prevent Market Abuse
SEBI also introduced new rules to prevent unfair practices like front-running and market abuse by asset management companies (AMCs). AMCs must now have strong internal controls, enhanced surveillance, and clear processes to deal with any misconduct, such as insider trading. They will be held responsible for any such violations.
Relaxed Rules for Passive Funds
Additionally, SEBI relaxed the rules on how much passive funds can invest in sponsor group company stocks. Previously, no fund house could invest more than 25% of its assets in a group of connected entities. This limit has now been increased to 35%, giving fund managers more flexibility.
Lower Minimum Ticket Size for Bonds
SEBI also reduced the minimum ticket size for bonds from 100,000 Indian rupees to 10,000 Indian rupees. This change makes bond investments more accessible to a wider range of investors, encouraging more people to participate in the market.
Enhancing Investment and Market Integrity
These new regulations aim to attract more investments into GIFT City, make operations easier for fund managers, and ensure the integrity of the financial markets. With these changes, GIFT City is set to become a key player in the global financial world.
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You might also read: Sharp Increase in NRI Property Bookings in GIFT City Over Last 2 Months, Say Developers
Image source: business-standard.com
