As per news reports, SEBI is preparing to release a consultation paper aimed at making it easier for foreign investors to net their trading positions. The move is part of a broader effort to deepen the reach of Indian capital markets and improve trading efficiency.
The proposed consultation paper focuses on netting of positions, which allows investors to offset buy and sell trades against each other. Instead of settling every individual trade, investors would only need to settle the final net position. This can reduce settlement costs, lower risk, and improve capital efficiency for foreign investors.
SEBI indicated that the consultation paper could be released very soon. If implemented, the change could make India’s markets more attractive and operationally simpler for global investors.
SEBI is also working on the introduction of a closing auction session, as per news reports. This would be a short trading window at the end of the day where orders are matched through an auction process. The aim is to arrive at a more stable and transparent closing price, reducing sharp price movements at market close.
The proposal is said to be at an advanced stage and could be announced shortly. Closing auctions are commonly used in global markets to improve price discovery.
On concerns around foreign portfolio investor (FPI) outflows, SEBI highlighted that capital flows are largely driven by returns, earnings growth and global market conditions, rather than regulation alone. India already has a stable and accessible market framework.
FPIs currently have around $900 billion invested in Indian markets. While outflows of about $18 billion have occurred over a period, such movements are viewed as cyclical rather than structural.
SEBI is also working to simplify and speed up FPI registration by reducing paperwork and increasing digitisation. A key initiative in this area is Swagat-FI, a single-window system designed to improve timelines, enable digital signatures and strengthen coordination with the Reserve Bank of India on KYC processes.
These steps aim to improve ease of doing business for foreign investors entering Indian markets.
SEBI continues to focus on developing the corporate bond market. Outstanding corporate bonds now stand at around ₹56 lakh crore, accounting for nearly 60% of bank credit to industry and services, up from about 40% a few years ago.
However, further progress is needed. SEBI has identified the need for more issuers, wider participation across credit ratings, including below-AAA bonds, and higher secondary market trading volumes. Work is also underway with the RBI on bond derivatives and other measures to improve liquidity.
Read more: Adani Power Share Price Performance Defies Rivals in 2025 As BSE Power Index Falls Nearly 14%.
SEBI’s proposed reforms, including netting, a closing auction session and faster FPI registration, signal a clear push towards deeper, more efficient and globally competitive markets. Alongside efforts to strengthen the corporate bond market, these measures aim to support long-term growth and investor confidence.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.
Published on: Jan 16, 2026, 2:11 PM IST
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