Sebi asks FPIs to report bets on hybrid securities separately

The Securities and Exchange Board of India (Sebi) has said foreign portfolio investors (FPIs) should report their investment in hybrid securities separately and has asked the depositories to make necessary arrangements for this.

Currently, the daily FPI net investment data and the FPI Assets Under Custody (AUC) data are disseminated by the depositories (NSDL and CDSL) for equity and debt markets.

At present, FPI investments are classified as either debt or equity depending on the type of the security in which the FPIs transact.

While FPIs are permitted to invest in real estate investment trusts (REITs) and Infrastructure Investment Trusts (InvITs) which are classified as hybrid securities, presently, the said investments are not reflected in the daily FPI net investment data or the monthly/fortnightly FPI AUC data. Hybrid securities generally combine both debt and equity characteristics.

In a circular dated November 15, Sebi said, "In order to capture FPI investment data in hybrid securities, a third category termed as 'hybrid security' shall be created for the purpose of capturing and disseminating FPI investment data in Hybrid securities."

Sebi asked depositories, NSDL and CDSL, to put in place the necessary systems for the daily reporting by the custodians of the FPIs and disseminate on their websites, the AUC of the FPIs in debt, equity and hybrid securities. This circular has come into effect immediately, Sebi said.

Securities and Exchange Board of India ( SEBI )