In an announcement made on Monday, October 26, for the MSCI Global Standard Indexes, MSCI or Morgan Stanley Capital Investment said that it will tweak foreign ownership limits in the Morgan Stanley Capital Investment Global Indexes comprising Indian securities coinciding with the November 2020 Semi Annual Index Review at the close of November 30, 2020, with effect from December 1, 2020.
In addition to this release Morgan Stanley Capital Investment stated that the foreign ownership limits tweaks are resulting from the relaxation of the Foreign Portfolio investment limit of Indian companies to the sectoral limit. The foreign ownership limits for securities in the MSCI India Equity Universe will be equal to the limit as per the 'Automatic Route' with the exception of cases where a higher limit has been agreed to under the Government Route or where lower limit has been set by the company's board and its General Body.
Furthermore, Morgan Stanley Capital Investment has said it will review the number of shares and the free float as per the cut off dates and triggers in different sections of the Global Investable Market Indexes methodology. Morgan Stanley Capital Investment, however, will not conduct an additional review of the free float for securities only subject to the foreign ownership limits changes. On the implementation of the new regime on FOL, MSCI India will rope in passive funds to the tune of $2.5 billion, estimates global index major. Interestingly, depositories including NSDL and CDSL, in April this year, raised the FOL for all listed entities to their sectoral limits.
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