SEBI dropped a game-changer on Friday, permitting Foreign Portfolio Investors to net funds within the same day’s cash market trades. The policy shift is designed to cut operational friction and expenses, zeroing in on chaos during index rebalances when trade volumes skyrocket.
Previously, FPIs faced the hassle of settling every buy and sell separately, tying up huge sums and incurring avoidable forex hits. Now, sales proceeds can directly fund same-day purchases, with only the net balance due at settlement.
Industry voices have pushed for this for years, citing how gross settlements amplified costs amid frenzied trading. SEBI’s response is pragmatic: rollout by end-2026, limited to outright trades in one security—no netting if both legs occur simultaneously.
Details matter here. Shortfall in sales? FPIs foot the bill. Surplus? It stays ring-fenced, unusable for other trades. Shares settle gross, taxes persist as is.
Looking ahead, this could supercharge FPI participation in Indian equities. By easing cash flow burdens, SEBI positions NSE and BSE as nimbler venues for global capital. Expect ripple effects on liquidity and benchmarking indices like Nifty, drawing more passive funds during rebalances.
