Market regulator Sebi on Tuesday said any new debt limits to be allocated to foreign funds through the auction route cannot be reinvested. The limit,allocated to the investor,will lapse either at the time of sale of the security or at redemption,it said.
Previously,the limit remained unchanged if the foreign fund reinvested the proceeds within five days. For already acquired limits,the facility of reinvestment will continue either till the total sales made from the existing debt portfolio is twice the size of its debt portfolio or the expiry of two years from now,i.e. January 2,2014,it said.
For all new allocations of debt limit under the long term infrastructure category,if a foreign investor decides to sell its holdings during lock-in period to another,the limit will automatically transfer to the purchasing entity. However,if an investor decides to sell or redeem their holdings after the lock-in period,the limit shall expire or lapse.