On 16-5-2025, the Securities and Exchange Board of India (‘SEBI’), issued a circular on extension of timeline for implementation of provisions regarding Offshore Derivate Instrumanets’ (ODI) and Foreign Portfolio Investors’ (FPI) with segregated portfolios to 17-11-2025.
Key Points:
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In a move welcomed by market players, the Securities and Exchange Board of India (‘SEBI’) has extended the timeline for key provisions of its circular on Offshore Derivative Instruments (‘ODIs’) and Foreign Portfolio Investors (‘FPIs’) with segregated portfolios.
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Originally, this was set to take effect on 17-5-2025, but in effect to this notification, the deadline has now been extended to 17-11-2025.
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This extension of timeline will be giving stakeholders more time to comply with the new disclosure and regulatory requirements and which comes in response to industry feedback, ensuring a smoother transition while maintaining SEBI’s objective of curbing regulatory arbitrage.
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While most provisions became effective after five months of the original notification, i.e., on 17-5-2025, but implementations of certain provisions will now be effective on 17-11-2025.
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This crucial step aiming to ensure smooth transition for the stakeholders while maintaining regulatory oversight was taken based on the market feedback.
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Through this circular, the Depositories are advised to put in place appropriate systems, procedures and mechanisms to ensure compliance with the provisions.
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Effect to the industry:
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The extension provides breathing room for investors, reducing the risk of sudden market disruptions due to regulatory changes.
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Enhanced transparency in ODI issuance and FPI operations will improve investor trust in Indian markets.
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ODI issuing FPIs will be needing to revise agreements with investors to reflect to the new compliance deadlines and disclosure mandates.
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Any ambiguity in compliance or failure to meet SEBI’s requirements could lead to legal disputes, requiring intervention from regulatory lawyers.
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SEBI has granted relief while tightening disclosure norms for ODI subscribers to enhance transparency and prevent regulatory oversight.
Note: ODI subscribers are investors who purchase Offshore Derivative Instruments (‘ODIs’), which are financial instruments issued by Foreign Portfolio Investors (‘FPIs’). These instruments allow investors to gain exposure to Indian securities without directly registering as FPIs.
