Business · Markets · 3 hrs ago
Sebi considers easing extra disclosure rules for foreign investors
India’s market regulator, Sebi, is reviewing extra disclosure rules for foreign funds that invest in Indian shares.
The rules require some foreign portfolio investors, or FPIs, to identify the people who ultimately own their funds.
They apply when a fund has at least ₹50,000 crore in Indian equities or puts more than half its Indian equity assets into one company or corporate group.
Sebi may seek feedback on relaxing the rules through a consultation paper.
One proposal would exempt funds with small holdings in a company, while another would cover investments in professionally run companies with no identifiable promoters and in public sector companies.
The rules were introduced after allegations by US firm Hindenburg Research against the Adani Group, and aim to prevent investors from hiding concentrated ownership or avoiding other regulations.
Sebi is weighing transparency against the risk of funds selling shares to avoid disclosure; the regulator has not yet announced any changes.
India’s market regulator is reviewing additional disclosure rules for foreign portfolio investors.
Sebi is expected to publish a consultation paper seeking feedback on possible changes.
The rules require some funds to disclose the ultimate beneficial owners of their investors.
Possible changes include exemptions for certain holdings and professionally run companies.
- Who
- India’s Securities and Exchange Board of India (Sebi) is reviewing the rules for foreign portfolio investors.
- What
- The regulator is considering easing additional disclosure requirements.
- When
- A consultation paper is expected; no publication date is stated.
- Where
- India.
- Why
- Sebi aims to maintain transparency and prevent regulatory circumvention while avoiding collateral effects such as funds selling shares to reduce their holdings.
This story does not have two clearly opposing sides.
Sebi introduced additional disclosure regulations for some foreign portfolio investors.
Economic Times reported that Sebi was reviewing the rules and was expected to release a consultation paper.
- Disclosure threshold
- More than 50% of an FPI’s India equity assets under management in one company or corporate group
- Disclosure threshold
- ₹50,000 crore or more in Indian-equity assets under management
- Required disclosure
- Ultimate beneficial owners, down to the last natural persons
- Possible exemption
- Concentrated investments in professionally run companies with no identifiable promoters and public sector undertakings
What people are saying
Sebi wants to rationalise the rules so that the twin objective, to enhance transparency and prevent circumvention of regulations by FPIs without causing any collateral damage like driving a fund to sell shares to lower its holding, is met
Some rationalisation, particularly, deciding an FPI's maximum holding in a company under which the fund could be spared from additional disclosures.