SEBI Considers Netting Settlements for FPIs to Reduce Costs and Compliance

The Securities and Exchange Board of India(SEBI) is reviewing whether foreign portfolio investors should be allowed to net their settlements for trades conducted on the same day.  

Speaking at the Goldman Sachs India CIO Conference, Chairman Tuhin Kanta Pandey said, “Currently, FPIs are required to give and take delivery for every trade. We are examining whether netting of settlements for trades executed on a single day can be permitted. This would ease operational convenience and reduce costs for FPIs.” 

Context of FPI Flows and Market Significance 

Pandey highlighted ongoing outflows from overseas investors, noting that since January 2024, FPIs have sold equities worth ₹1.5 trillion, while domestic institutional investors have invested ₹12 trillion during the same period.  

Despite this divergence, he stressed that “foreign investors remain central to our markets,” emphasising India’s long-standing relationship with global funds. He also outlined a series of reforms aimed at offering a “best-in-class experience” as India’s capital markets expand. 

Registration Reforms and Fast-Track Access for Trusted Institutions 

SEBI is preparing a digital overhaul of the FPI registration framework, shifting to a fully paperless system supported by digital signatures, significantly reducing registration timelines. Pandey announced that a second registration platform, being developed by Central Depository Services Limited, will further enhance efficiency.  

He also said SWAGAT-FIs, a new fast-track category for trusted foreign institutions, may eventually gain access to other FEMA-approved routes without additional compliance steps, subject to ongoing discussions with the RBI and the Finance Ministry. 

Market Development Priorities Across Equities, Bonds and Commodities 

Looking ahead, Pandey said SEBI will focus on strengthening the cash equities market. A working group will conduct a comprehensive review of short selling rules and the securities lending and borrowing framework to improve linkages with derivatives. He confirmed SEBI’s commitment to introducing a closing auction session following stakeholder consultations to support better price discovery.  

He added that corporate bond market development remains a key priority, with an emphasis on boosting retail participation. In the commodities segment covering agri and non-agri products, SEBI is evaluating ways to widen institutional involvement while maintaining strong risk controls. 

Read More: SEBI Set to Review Its Plan to Slash Brokerage Costs for AMCs! 

Conclusion 

Pandey’s announcements reflect Sebi’s broader agenda to modernise market infrastructure, enhance investor experience and reinforce India’s marketplace as it integrates more deeply with global capital flows. 

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