Capital market regulator Sebi on Monday restricted foreign investors from buying government securities having maturity of less than one year, a move that aims at encouraging inflows of long-term overseas fund.

“FIIs (Foreign Institutional Investors)/QFIs (Qualified Foreign Investors) shall henceforth be permitted to invest only in dated government securities having residual maturity of one year or above,” Sebi said in a circular.

Securities and Exchange Board of India added that the “existing FII/QFI investments in Treasury Bills shall be allowed to taper off on maturity/sale”.

More In: Industry | Business