Guidelines for issuance of ODIs by the ODI issuing FPIs
Published: Jul 08, 2017
By TIOLCORP News Service
NEW DELHI, JULY 08 2017: The Securities and Exchange Board of India (SEBI) now require all Foreign Portfolio Investors (FPIs) issuing ODIs (ODI Issuers) to comply with certain conditions for issuance of ODIs. The ODI issuing FPIs shall not be allowed to issue ODIs with derivative as underlying, with the exception of those derivative positions that are taken by the ODI issuing FPI for hedging the equity shares held by it, on a one to one basis. In the case of the existing ODIs which have been issued by the ODI issuing FPIs with derivatives as underlying, where the said underlying derivatives position are not for purpose of hedging the equity shares held by it, the ODI issuing FPI has to liquidate such ODIs latest by the date of maturity of the ODI instrument or by December 31, 2020, whichever is earlier. However, ODI issuing FPIs should endeavor to liquidate such ODI instruments prior to said timeline. In the case of issuance of fresh ODIs with derivatives as underlying, a certificate has to be issued by the compliance officer (or equivalent) of the ODI issuing FPI, certifying that the derivatives position, on which the ODI is being issued, is only for hedging the equity shares held by it, on a one to one basis. The said certificate shall be submitted along with the monthly ODI reports. The said information was made available vide circular dated July 7, 2017 issued by SEBI in this regard.
(See: SEBI Circular)