Mumbai: Investment by foreign institutional investors (FIIs) in securities of asset reconstruction companies should be within the prescribed corporate debt limit, market regulator SEBI said Tuesday.
In April this year, the consolidated FDI policy issued by the Department of Industrial Policy and Promotion (DIPP) had stated that FII investments in security receipts issued by asset reconstruction companies (ARCs) have to be within the FII limit on corporate bonds assigned from time to time.
"Accordingly, the investments in security receipts issued by Asset Reconstruction Companies by FII's shall be reckoned against the extant corporate debt limits," SEBI said in a circular Tuesday.
The regulator added that investments of FIIs in the security receipts would be subject to terms and conditions specified by the Reserve Bank of India.
As per SEBI, the guidelines have been issued to protect the interests of investors in securities and "to promote the development of, and to regulate the securities market".
"This circular shall come into effect immediately," it added.
First Published: Tuesday, July 9, 2013, 21:27