Offshore Derivative Instruments: SEBI Extends ODI Deadline
Why in the news
Industry asked for more time, so SEBI delayed its tighter ODI norms by six months.
Key facts
- Issued by SEBI-registered FIIs or FPIs; underlying assets are Indian shares and equity derivatives such as Nifty futures.
- Appeal: confidentiality, regulatory ease and quick market access.
- Types: P-notes, equity-linked, capped return and participating return notes.
Concerns and earlier steps
- Worries: opacity, round-tripping and money laundering.
- December 2024: FPIs barred from issuing ODIs with derivative exposure.
- Issuers must disclose ultimate beneficial owners; no hedging with Indian derivatives; tighter disclosure for FPIs with segregated portfolios.
Revised framework
| Area | Rule |
|---|---|
| Disclosure | Needed if over 50% of equity ODIs sit in one Indian group or total exposure exceeds ₹25,000 crore |
| Backing | Positions fully supported one-to-one by non-derivative securities |
| Registration | Separate ‘ODI’ suffix registration under same PAN; exempt if backed only by government securities |
Exam angle
- New deadline: 17 November 2025.
- Thresholds: 50% and ₹25,000 crore.