Mumbai, Feb 12: SEBI today clarified that investments by Foreign Institutional Investors (FII) in derivative contracts, both equity futures and options, does not attract the investment ceiling as prescribed by market regulator for cash market provided they do not result in physical delivery. "Trading by FIIs and their sub-accounts in derivatives contracts till these are not resulting into settlement by physical delivery of underlying stocks shall not attract the investment limit of 10 per cent or five of the total issued capital of the company as prescribed in SEBI regulations, 1995", SEBI said in a circular to the custodians here.

The investment in equity derivatives does not give nay benefit such as voting rights and bonus shares to the investors, SEBI sources said.

According to market sources this clarification comes in the wake of FIIs making investment into equity futures and options of the State Bank of India scrip.

Meanwhile, Reserve Bank of India spokesperson said that the apex bank is examining the issue of investment limits in light of sector specific ceiling on foreign investment prescribed by the various departments of Union Government.

SBI scrip which rose by Rs 5.65 to close at Rs 300.05 on the Bombay Stock Exchange, saw a total volume of Rs 130.7 crore. Bureau Report