ODI issuances now made subject to additional conditions. This was in line with a Consultation paper previously issued and approval previously granted by the SEBI Board.
Unfortunately, there was some unwarranted dramatic interpretation of the circular, that ODIs are completely banned!
The same was promptly clarified by the regulator.
The New Normal: ODIs now required to be fully hedged with same underlying securities and on a one-to-one basis. At that, throughout the tenure of the ODI.
This means:
1) No ODIs to be issued against derivatives
2) No Delta hedging, etc.
3) ODI issuance segregated from other investments
You may refer to the previously circulated alert ODIs only on one-to-one basis & not against derivatives – Juris Corp | Advocates & Solicitors on the same.
For further details, please see:
Amendments to FPI laws on ODIs & FPI with segregated portfolios
For any queries / clarifications, please feel free to ping us and we will be happy to chat:
