SEBI Board Meet on March 23: Proposal to Allow FPI Fund Netting for Same-Day Trades on Agenda

The Securities and Exchange Board of India (SEBI) is contemplating a significant policy change that could allow foreign portfolio investors (FPIs) to net funds across same-day cash market transactions. This potential reform is set to be discussed in SEBI's board meeting on March 23, 2026. 

Netting of Funds for FPIs 

The proposed framework aims to ease liquidity pressure and reduce funding costs for FPIs, particularly during high-volume trading sessions like index rebalancing days. If approved, FPIs will be able to use proceeds from sale transactions to fund purchase transactions on the same day, requiring only the fulfilment of net fund obligations. However, netting may not apply if the FPI buys and sells the same stock or security on the same day or settlement cycle. 

Currently, FPIs must fund purchase transactions and deliver securities for sale trades separately, leading to additional costs due to forex slippage and reliance on short-term credit lines. The existing practice leaves FPIs underinvested for at least 1 day. 

Relaxations for REITs and InvITs 

SEBI is also expected to approve several relaxations for Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs). These include expanding the scope of investing in liquid fund schemes. SEBI may allow REITs and InvITs to invest in schemes with a credit risk value of 10 or above, diversifying portfolios beyond the current threshold of 12. 

Changes in Compliance Norms 

Additionally, SEBI may ease compliance with the ‘fit and proper person’ criteria for market intermediaries such as stock brokers. This could involve removing automatic disqualifications arising solely from the filing of criminal complaints, FIRs, or charge sheets in cases involving economic offences, potentially reducing regulatory uncertainty for entities facing initial legal proceedings. 

Read More: FPIs Withdraw Over ₹52,700 Crore in March as Financial Stocks See Significant Selling! 

Conclusion 

The upcoming SEBI board meeting on March 23, 2026, is poised to address critical reforms, including the netting of funds for FPIs, relaxations for REITs and InvITs, and changes in compliance norms for market intermediaries. These discussions reflect SEBI's ongoing efforts to streamline market operations and reduce regulatory burdens. 

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