Sebi Moves to Speed Up FPI Funds Settlement by 2024

Sebi Whole-Time Member Ananth Narayan G announced that foreign portfolio investors (FPIs) will receive funds on the same day of settlement, starting October 2024. Currently, FPIs receive funds two days after the transaction. This change aims to streamline the process and ensure timely fund remittance.

Sebi Whole-Time Member Ananth Narayan G on Thursday announced a significant policy shift, stating that foreign portfolio investors (FPIs) will start receiving funds on the day of settlement beginning October 2024.

As of now, FPIs receive their funds two days post-transaction or the next day after settlement. Speaking at the annual GFF, Narayan emphasized that custodians will be expected to remit funds promptly, ensuring all tax obligations are met as advised by tax consultants.

The custodians will provide transaction details based on inputs from clearing corporations by T+0 evening, facilitating tax-related formalities to be completed by T+1 for same-day fund remittance. This float, currently holding around Rs 1 lakh crore, will see a significant reduction in lag time, and brokers holding client funds, which generate significant interest income, will see changes in their business dynamics.

(With inputs from agencies.)