MSCI Defers decision : increases in Foreign Ownership Limits (FOL)

MSCI will defer until further notice potential increases in Foreign Ownership Limits (FOL) resulting from the recently implemented relaxation of the Foreign Portfolio Investor (FPI) limit of Indian companies to the sectoral limit.

The sectoral limits published by National Securities Depository Limited (NSDL) & Central Depository Services Limited (CDSL) are new and more time is required for market participants to test the disclosure mechanism. MSCI is awaiting further clarifications on the timeliness, quality and standardization of the data provided by NSDL & CDSL before making related changes to the MSCI Indexes. MSCI will, therefore, defer potential increases in the current FOLs and resulting changes to the Foreign Inclusion Factors (FIF) of Indian securities as part of the Quarterly Index Reviews (QIR)/Semi-Annual Index Reviews (SAIR) and corporate events.

However, MSCI will continue to monitor securities included on the CDSL & NSDL lists for which the Red flag or Breach limit has been reached and apply the relevant treatment as per the Global Investable Market Indexes (GIMI) methodology.

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