SEBI Extends ODI Framework Deadline by FPIs to November 17, 2025

The Securities and Exchange Board of India (SEBI) has extended the compliance deadline for its revised offshore derivative instruments (ODIs) framework. Initially set for May 17, 2025, the deadline will now end on November 17, 2025.

This decision was announced through a circular issued on Friday, following feedback from market participants requesting more time for implementation.

What the Framework Involves

SEBI’s circular from December introduced changes to how ODIs, also known as participatory notes or P-Notes, are regulated. The update requires more detailed disclosures from ODI subscribers, especially those with significant exposure to a single Indian corporate group.

Under the revised framework:

• ODI subscribers holding more than 50% of their equity ODI positions in one Indian corporate group, or
• Those with equity ODI exposure exceeding ₹25,000 crore in Indian markets
  must submit granular disclosures.

The plan is to bring ODI regulations in line with those for Foreign Portfolio Investors (FPIs), and reduce the scope for regulatory arbitrage.

Restrictions on Derivative Use

SEBI has also proposed restrictions on the use of derivatives in relation to ODIs:

• FPIs cannot issue ODIs with derivatives as the underlying.
• Derivatives cannot be used to hedge ODI positions.
• ODIs must reference only non-derivative securities and be fully hedged on a one-to-one basis with those securities.

Separate Registration for ODI Issuers

The framework also introduces a separate registration requirement for FPIs that issue ODIs. These entities will need to register with a suffix “ODI” under the same PAN.

For existing FPIs, this addition will not be treated as a name change. No new registration is required if ODIs are backed solely by government securities.

Read more: SEBI Proposes Key Reforms for Angel Funds to Boost Capital Flow to Start-Ups.

Conclusion

The extension gives affected entities additional time to adjust to the updated compliance rules. The framework will now come into effect from November 17, 2025.

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