Mumbai (PTI): Market regulator SEBI on Thursday raised the limit of cumulative investment in government debt securities by FIIs and their sub accounts by $ 600 million to $ 3.2 billion.

"It has now been decided to further enhance the limit (for FIIs/sub-accounts cumulative investment in Government/Treasury Bills) to $ 3.2 billion," SEBI said in a circular.

Earlier last year, SEBI had raised this limit to $ 2.6 billion from $ 2 billion.

The market regulator has also decided to treat all investments by FIIs and their sub-accounts in units of debt-oriented mutual funds as corporate debt only.

As such, FII investment in these units would have to prescribe to $ 1.5-billion ceiling, as is stipulated for corporate debt.

Currently, there was no uniformity whether to consider investments by FIIs in debt-oriented mutual funds as debt or equity.