Description

ICCL advises members of SEBI's framework for net settlement of funds for Foreign Portfolio Investors (FPIs) in the cash market, as per SEBI Circular dated April 24, 2026.

Summary

The Indian Clearing Corporation Limited (ICCL) has issued a notice advising all members about SEBI’s framework for net settlement of funds for transactions done by Foreign Portfolio Investors (FPIs) in the cash market. This follows SEBI Circular no. HO/(1)2026-AFD-POD2/I/10157/2026 dated April 24, 2026.

Key Points

  • ICCL is communicating SEBI’s new framework for net settlement of funds specifically applicable to FPI transactions in the cash market.
  • The framework is based on SEBI Circular no. HO/(1)2026-AFD-POD2/I/10157/2026 dated April 24, 2026.
  • The full SEBI circular is enclosed as Annexure 1 for member reference.
  • All members of BSE/ICCL are advised to take note of and comply with the framework.

Regulatory Changes

SEBI has introduced a framework for net settlement of funds for FPI transactions in the cash market. The detailed provisions are contained in the referenced SEBI circular (Annexure 1). This represents a regulatory update to how FPI fund obligations are netted and settled through clearing corporations.

Compliance Requirements

  • All exchange members must take note of the new net settlement framework for FPI transactions.
  • Members dealing with FPI clients should ensure their settlement processes align with the new framework.
  • Members are expected to refer to Annexure 1 (SEBI Circular dated April 24, 2026) for the complete operational requirements.

Important Dates

  • April 24, 2026: Date of original SEBI Circular (HO/(1)2026-AFD-POD2/I/10157/2026) introducing the framework.
  • April 27, 2026: Date of ICCL notice communicating the framework to BSE members.

Impact Assessment

This framework has significant operational impact on clearing and settlement for FPI participants in the Indian cash equity market. Net settlement of funds for FPIs can reduce settlement obligations, lower counterparty risk, and improve capital efficiency for foreign institutional investors. Members with FPI clients will need to update their settlement workflows and back-office processes to comply with the new netting framework. The change affects a broad segment of institutional market participants and clearing members.

Impact Justification

Introduces a new settlement framework for FPIs in the cash market, directly affecting clearing and settlement operations for a major class of institutional investors.