ARTICLE · 14 NOVEMBER 2019

Voluntary Retention Route: A Halfway Measure?

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All FPI investors registered with SEBI are eligible to participate in VRR. Investments under VRR are in addition to the limits prescribed for debt investments.

IndiaCorporate/Commercial Law

Sawant Singh

Aditya Bhargava

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The government and the financial sector regulators (Reserve Bank of Indian (RBI) and the Securities and Exchange Board of Indian (SEBI)) has brought in various measures to ease investment and related rules for foreign portfolio investors (FPIs).

The RBI and SEBI circulars of June 2018 eased group exposure thresholds (20%) and per issue investment limit (50%) of an issue. The RBI issued a discussion paper in October 2018 on voluntary retention route (VRR) to facilitate FPI investment in debt.

Under VRR, FPIs would have more operational flexibility in terms of instruments as well as exemptions from concentration limits, and group-level and issue-level thresholds. Following the discussion paper, the RBI issued a circular on VRR on 1 March.

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Voluntary Retention Route: A Halfway Measure?

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