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SEBI to auction Rs 23,000 crore worth govt bonds for FIIs

22 Jul 2013 Evaluate

Market regulator Securities and Exchange Board of India (SEBI) will conduct an auction on Monday for the grant of investment limits to foreign investors in government debt securities, marking second auction for debt securities since a hike last month in the investment limits for FIIs in government debt to $30 billion, from $25 billion previously. Post this, foreign institutional investors (FIIs) at the auction, to be held on the National Stock Exchange (NSE), would be able to bid for investment limits of Rs 23,661 crore in government bonds.

This development comes on the heels of previous month’s auction for grant of investment limits to foreign investors in government debt securities worth over Rs 42,000 crore by SEBI, which turned out to be the biggest sale of G-Secs so far this year. The auction had attracted bids worth Rs 39,171 crore, with a total of 37 FIIs participating in the auction. As a matter of fact, the Indian debt markets had witnessed robust interest from FIIs last year as well, when their net investments stood at close to Rs 35,000 crore.

Meanwhile, the Reserve Bank of India has asked SEBI to further tighten the trading norms for currency derivatives, a move that the capital market regulator has resisted so far. Consequently, SEBI has urged the exchanges to collect details about trading activities of all their members for new clients in the currency derivatives segment. Besides, some reports also suggested that the exchanges have also been asked to keep a check on any shift in market positions of the existing clients. RBI, along with the government and SEBI, has undertaken a number of steps to check the volatility of the rupee, which went into a tailspin after Federal Reserve Chairman Ben Bernanke indicated that the quantitative easing programme could be tapered later in the year.

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