Sebi Extends ODI Framework Deadline for FPIs to November 17
Providing interim relief for FPI's, SEBI has extended the timeline for implementing the tightened framework on ODI's
The Securities and Exchange Board of India (Sebi) has extended the timeline for implementing its tightened framework on offshore derivative instruments (ODIs) issued by Foreign Portfolio Investors (FPIs) to November 17, 2025, from the original May 17 deadline.
Announced in a Friday circular, the extension follows market participants’ requests to ensure smooth compliance with the December 2024 framework, aimed at curbing regulatory arbitrage and enhancing transparency.
The framework mandates additional disclosures for ODI subscribers and FPIs with segregated portfolios. It prohibits FPIs from issuing ODIs with derivatives as underlying assets or using derivatives to hedge ODIs on Indian stock exchanges.
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ODIs must reference non-derivative securities and be fully hedged one-to-one with identical securities. FPIs issuing ODIs require a separate registration with an “ODI” suffix under the same PAN, though existing FPIs adding the suffix avoid re-registration. ODIs backed by government securities are exempt from separate registration.
Sebi requires ODI subscribers to disclose ownership details up to natural persons if their equity ODI positions exceed 50% of securities tied to a single Indian corporate group or their total equity positions surpass Rs 25,000 crore.
This covers positions through multiple FPIs or entities with common ownership. Exemptions apply to government-related investors, Public Retail Funds, and Exchange Traded Funds with less than 50% Indian equity exposure, subject to validation.
The extension reflects Sebi’s response to industry feedback, balancing stricter oversight with practical implementation. The framework aims to align ODI practices with India’s market integrity goals, impacting FPIs managing $85 billion in ODI assets as of March 2025, per industry estimates.
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