The Securities and Exchange Board of India (Sebi) has operationalised its proposal to allow net settlement of funds for foreign portfolio investors (FPIs) in the cash market, with a deadline set for December 31, 2026. This change is designed to alleviate liquidity pressures and reduce transaction costs for FPIs, who have been significant sellers of domestic equities in recent years. The existing gross settlement framework has been criticized for leading to higher funding requirements and forex-related costs, particularly during high trading periods such as index rebalancing. Under the new framework, FPIs will be permitted to net fund obligations for 'outright transactions,' which involve either a purchase or a sale of a security within a settlement cycle. However, trades with both buy and sell transactions in the same security will continue to be settled on a gross basis. While fund obligations can be netted, the settlement of securities will remain on a gross basis, and statutory levies like securities transaction tax (STT) will still apply. Sebi has indicated that the pay-in obligation could decrease by half compared to the current gross settlement mechanism. Additionally, Sebi has approved four initial public offerings (IPOs) from various companies, including Yatayat Corporation and EAAA India Alternatives.