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The Securities and Exchange Board of India (SEBI) is set to release a consultation paper that could make it easier for foreign investors to net their positions, SEBI Chairman Tuhin Kanta Pandey said on the sidelines of the regulator's annual conference, Samvad 2026.
“I think the consultation paper will be out very soon, maybe it is out today,” Pandey said.
Netting allows investors to offset their buy and sell positions against each other, so they only have to settle the final difference instead of every single trade.
He also hinted at another change that traders have been waiting for — the introduction of a closing auction session, a brief window at the end of the day where orders are matched through an auction to discover a more stable and transparent closing price. He said the proposal is at an advanced stage and could be announced shortly.
Also Read | SEBI expense ratio changes unlikely to hit KFin Tech margins: CFO Vivek Mathur
On the broader question whether foreign portfolio investors (FPIs) are drifting away from India, Pandey pushed back against the idea that regulations are the key factor. He said flows are driven far more by returns, earnings growth and global conditions.
He said India’s market framework is already stable and accessible, and investor decisions are driven by comparisons across markets.
“This is not really an issue of being welcomed or not welcomed,” Pandey said.
Putting the numbers in context, he noted that FPIs currently have about $900 billion invested in Indian markets. While there have been outflows of around $18 billion over a period, such movements tend to be cyclical.
Pandey said SEBI is working to make Indian markets deeper and more diversified, especially the corporate bond market, so that investors can shift between equity and debt depending on conditions.
He said one key area of reform is simplifying and speeding up FPI registration through digitisation and reducing paperwork.
“We are looking at registration, which is faster,” he said.
Also Read | What’s driving bonds today: RBI boost, lighter supply, and a big PFC issue
He added that SEBI has introduced Single Window Automatic & Generalised Access for Trusted Foreign Investors (Swagat-FI), a system aimed at providing clarity on timelines, using digital signatures and improving coordination on KYC with the Reserve Bank of India (RBI).
On questions related to withholding tax on FPIs and the difference in capital gains tax between equity and debt, Pandey declined to comment, citing the upcoming Union Budget.
He said such decisions rest with the finance ministry.
On the corporate bond market, Pandey said trading activity exists but needs to improve further.
He said outstanding corporate bonds now stand at about ₹56 lakh crore, and account for around 60% of bank credit to industry and services, up from about 40% a few years ago.
However, he said the market needs:
SEBI and the RBI are working together on bond derivatives and other measures to improve liquidity, he added.
Catch all the latest updates from the stock market here
Also, catch the latest Budget 2026 expectations updates here
“I think the consultation paper will be out very soon, maybe it is out today,” Pandey said.
Netting allows investors to offset their buy and sell positions against each other, so they only have to settle the final difference instead of every single trade.
He also hinted at another change that traders have been waiting for — the introduction of a closing auction session, a brief window at the end of the day where orders are matched through an auction to discover a more stable and transparent closing price. He said the proposal is at an advanced stage and could be announced shortly.
Also Read | SEBI expense ratio changes unlikely to hit KFin Tech margins: CFO Vivek Mathur
On the broader question whether foreign portfolio investors (FPIs) are drifting away from India, Pandey pushed back against the idea that regulations are the key factor. He said flows are driven far more by returns, earnings growth and global conditions.
He said India’s market framework is already stable and accessible, and investor decisions are driven by comparisons across markets.
“This is not really an issue of being welcomed or not welcomed,” Pandey said.
Putting the numbers in context, he noted that FPIs currently have about $900 billion invested in Indian markets. While there have been outflows of around $18 billion over a period, such movements tend to be cyclical.
Pandey said SEBI is working to make Indian markets deeper and more diversified, especially the corporate bond market, so that investors can shift between equity and debt depending on conditions.
He said one key area of reform is simplifying and speeding up FPI registration through digitisation and reducing paperwork.
“We are looking at registration, which is faster,” he said.
Also Read | What’s driving bonds today: RBI boost, lighter supply, and a big PFC issue
He added that SEBI has introduced Single Window Automatic & Generalised Access for Trusted Foreign Investors (Swagat-FI), a system aimed at providing clarity on timelines, using digital signatures and improving coordination on KYC with the Reserve Bank of India (RBI).
On questions related to withholding tax on FPIs and the difference in capital gains tax between equity and debt, Pandey declined to comment, citing the upcoming Union Budget.
He said such decisions rest with the finance ministry.
On the corporate bond market, Pandey said trading activity exists but needs to improve further.
He said outstanding corporate bonds now stand at about ₹56 lakh crore, and account for around 60% of bank credit to industry and services, up from about 40% a few years ago.
However, he said the market needs:
- More issuers
- Wider participation across credit ratings, including below-AAA bonds
- Higher secondary market trading volumes
SEBI and the RBI are working together on bond derivatives and other measures to improve liquidity, he added.
Catch all the latest updates from the stock market here
Also, catch the latest Budget 2026 expectations updates here
