Sebi suggests same-day fund netting for FPIs to boost operational efficiency and cut costs

NEW DELHI: Markets regulator Sebi on Friday proposed allowing Foreign Portfolio Investors (FPIs) to net funds for same-day cash market trades instead of settling each transaction on a gross basis, a move aimed at improving operational efficiency and lowering funding costs, particularly during index rebalancing days.

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At present, FPIs are required to settle equity cash market trades on a gross basis, funding each purchase independently of sale transactions, even when both occur on the same day. This framework results in additional funding costs for at least one extra day and can also expose FPIs to forex slippage while buying and selling currency to meet settlement obligations.

To address these issues,