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  5. SEBI board to consider easing FPI settlement norms on Monday: Report

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SEBI board to consider easing FPI settlement norms on Monday: Report

Upstox
By Upstox News Desk

2 min read | Updated on March 22, 2026, 15:30 IST

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SUMMARY

A major item for the board will be to allow FPIs to net funds for same-day cash market trades, instead of settling each trade individually.

A legal heirship certificate should be issued by a revenue authority not below the rank of a Tehsildar, SEBI said. | Image: Shutterstock

The board will also oversee the overhaul of the "fit and proper person" criteria for market intermediaries. Image: Shutterstock

Market regulator Securities and Exchange Board of India (SEBI) will conduct a board meeting on Monday, March 23, to consider a host of issues including a proposal to ease fund settlement norms for foreign portfolio investors (FPIs), and changes to regulatory frameworks for market intermediaries, news agency Press Trust of India (PTI) reported citing people familiar with the matter.
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A major item for the board will be to allow FPIs to net funds for same-day cash market trades, instead of settling each trade individually.

Under the existing framework, an FPI needs to settle equity cash market trades on a gross basis, funding each purchase transaction independently of any sale transactions, even on the same day. SEBI has proposed permitting "netting of funds", which would allow FPIs to use proceeds from same-day sales to offset purchase obligations, thereby requiring them to meet only the net payable amount, PTI report said.

The move is aimed at enhancing operational efficiency and reducing the cost of funding for them, especially on index rebalancing days. Also, it is expected to minimise forex-related costs arising from timing mismatches between inflows and outflows. The proposal follows concerns that the current gross settlement system imposes additional funding requirements on FPIs for at least one extra day, increasing transaction costs. This will be the fifth board meeting chaired by SEBI Chairman Tuhin Kanta Pandey since he assumed office on March 1, 2025, the report added.

The board will also oversee the overhaul of the "fit and proper person" criteria for market intermediaries, to enhance procedural clarity and fairness, PTI report said.
"Under this, SEBI is considering a proposal to abolish the reference to initiation of winding-up proceedings as a disqualification in a bid to ensure that only a final winding-up order, and not mere initiation of proceedings, is considered while assessing whether a person is fit and proper," PTI reported.

The board will also take up ease-of-doing business proposals related to real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). Another significant agenda item is the consideration of a report submitted by a high-level panel on conflict of interest and transparency. The regulator will discuss the panel's report, which proposes comprehensive reforms to bring in transparency by way of greater disclosure and a "zero-tolerance" culture to address conflict of interest of top officials of SEBI, the report added.

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