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SEBI Permits Fund Netting for FPI Cash Market Transactions, Reducing Funding Expenses

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SEBI Allows Fund Netting for FPI Cash Market Trades, Cuts Funding Costs

Under the current framework, FPIs are required to settle equity cash market trades on a gross basis, meaning they must fund the full value of purchase transactions even if they have offsetting sales on the same day. Netting will allow FPIs to use same-day sale proceeds to meet purchase obligations, requiring them to fund only the net amount payable for the settlement day.

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Moneycontrol•23-03-2026, 17:26

SEBI Allows Fund Netting for FPI Cash Market Trades, Cuts Funding Costs

•SEBI permits Foreign Portfolio Investors (FPIs) to net funds from same-day cash market transactions.
•The move aims to reduce liquidity pressure and funding costs for FPIs, especially during high-volume trading.
•Currently, FPIs must fund the full value of purchase transactions even with offsetting sales; netting allows use of sale proceeds for purchases.
•Netting will be limited to outright transactions where an FPI has either a buy or a sell position, not both, in a settlement cycle.
•The proposal will be implemented before December 31, 2026, addressing concerns about inefficiencies and higher funding costs.

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