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Foreign portfolio investors can now invest in municipal bonds: SEBI

As per the RBI, foreign investment in municipal bonds should be within the limits set for FPI investment in State Development Loans (SDLs)

twitter-logo PTI        Last Updated: May 8, 2019  | 18:58 IST
Foreign portfolio investors can now invest in municipal bonds: SEBI

Foreign portfolio investors can now invest in municipal bonds, markets regulator Sebi said in a circular Wednesday.

The circular comes almost two weeks after the Reserve Bank of India permitted FPIs to invest in municipal bonds as a measure to broaden access of non-resident investors to debt instruments in the country.

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As per the RBI, foreign investment in municipal bonds should be within the limits set for FPI investment in State Development Loans (SDLs).

The limits for FPI investment in SDLs is 2 per cent of the outstanding stock of securities.

All other existing conditions for investment by FPIs in the debt market remain unchanged, the central bank had said in a circular on April 25.

In 2017, Sebi eased rules governing the issuance of municipal bonds in order to boost such bond market. It allowed municipalities with a surplus in their books in three immediately preceding financial years to issue public debt securities.

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