Foreign Investors To Now Access Sale Proceeds As Quickly As Domestic Investors

Foreign portfolio investors can now access their sale proceeds as quickly as domestic investors, that is, on the settlement day itself, as per a circular issued by the Securities and Exchange Board of India on Wednesday.

Overseas investors had reported delays, saying that they could not access their sale proceeds on ‘T+1’ settlement date. These delays were usually caused by tax clearance processes and compliance with FEMA regulations.

Resultantly, the markets regulator worked with key groups like FPIs, clearing corporations, custodians, and tax experts to improve the process.

Starting Sept. 9, 2024, FPIs selling securities will receive their tax certificates by 9:00 a.m. the next day (T+1 day). This means they can either withdraw or reinvest their money on the same day. These changes are expected to boost efficiency, saving around Rs 2,000 crore each year.

SEBI expects these improvements to strengthen India as a top investment destination for FPIs, by making the process more investor-friendly.