Dear All,
RBI vide circular dated 08th November 2021 has allowed FPIs to invest in debt securities issued by InvITs and REITs.
Circular Date: November 08, 2021
Attention: Authorised Dealer Category-I (AD Category-I) banks in relation to Schedule 1 to the Foreign Exchange Management (Debt Instruments) Regulations, 2019 (“Regulations”)
Reference: Notification No. FEMA.396/2019-RB dated October 17, 2019
A.P. (DIR Series) Circular No. 31 dated June 15, 2018
A.P. (DIR Series) Circular No. 34 dated May 24, 2019
Notification: In the Union Budget 2021-22, an announcement was made that debt financing of Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) by Foreign Portfolio Investors (FPIs) will be enabled by making suitable amendments in the relevant legislations.
Hence, it has now been permitted that FPIs can invest in debt securities issued by InvITs and REITs.
The aforesaid Regulations have been updated and notified on October 21, 2021, vide Notification No. FEMA 396/2019-RB dated October 17, 2019
FPIs can now acquire debt securities under Medium-Term Framework (MTF) or the Voluntary Retention Route (VRR) issued by InvITs and REITs. These investments are to be reckoned within the limits and are subject to terms and conditions under the respective regulations of MTF and VRR.
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