National Pension Service in Final Stages of Approval to Invest in Indian Government Bonds: Reuters

Reuters reported on the 22nd (local time) that South Korea's National Pension Service (NPS), the world's third-largest public pension fund, is undergoing procedures to obtain regulatory approval to invest in Indian government bonds.

Citing two sources, Reuters reported that the NPS is applying for investment approval through a relaxed regulatory framework established by the Securities and Exchange Board of India (SEBI) specifically for foreign entities investing exclusively in government bonds.

However, the sources declined to be identified because the discussions regarding the investment are private.

One of the sources explained that "the relaxed rules were designed to facilitate investments by pension funds and sovereign wealth funds, which tend to favor Indian government bonds."

"In the case of South Korea's pension fund (the NPS), negotiations are currently in the final stages," the source added, noting that it is expected to become one of the major global pension funds to utilize this pathway (the relaxed regulatory procedure).

To increase the inflow of foreign capital into its government bond market, the Indian government has recently streamlined registration procedures for foreign investors, lowered taxes, and pursued the inclusion of Indian government bonds in global bond indices.

Under the relaxed regulatory procedures, low-risk investors such as pension funds and sovereign wealth funds only need to submit documents once every 10 years, compared to the previous requirement of every three years.

Furthermore, they are not required to submit detailed information about ultimate beneficial owners, which is typically demanded of equity and corporate bond investors.

Unlike other major global markets where foreign investors can access government bonds with limited pre-registration requirements, India has previously required investors to complete registration and continually submit documentation to verify their identity and qualifications.

Reuters noted that while the National Pension Service (NPS) invests in Indian securities through offshore funds managed by various fund managers, the majority of these investments are concentrated in equities.

The size of Indian government bonds held by foreign investors currently stands at 4 trillion rupees (approximately 56.84 trillion won).

According to data from the National Securities Depository Limited (NSDL), Indian bonds held by foreign pension funds remain relatively small at 469 billion rupees (approximately 6.67 trillion won).

The NPS currently manages 1,865.5 trillion won in accumulated funds, making it the third-largest in the world following Norway's Government Pension Fund Global (NBIM) and Japan's Government Pension Investment Fund (GPIF).
※ Please note: This article was translated by AI and may contain errors.