SEBI tightens disclosure and ownership norms for FPIs

The Securities and Exchange Board of India's (SEBI) board on Wednesday tightened norms for foreign portfolio investors by introducing additional granular level disclosures.

These granular level disclosures are regarding ownership, economic interest is for FPIs holding more than 50% of their Indian equity AUM in a single Indian corporate group or FPIs that individually, or along with their investor group, hold equity AUM worth more than Rs 25,000 crore in the Indian markets.

SEBI also said that there are certain entities that have been exempted from making such additional disclosures, which, inter-alia, include government and government- related investors, pension funds and public retail funds, certain listed ETFs, corporate entities and verified pooled investment vehicles meeting certain conditions.

The board has approved changes for aligning the eligible criteria in regulations with the reduced threshold prescribed under PML rule, SEBI said.

This has been brought with an objective to guard against circumvention of rules such as the requirement for Minimum Public Shareholding (MPS) or disclosures under Substantial Acquistion of Shares and Takeovers Regulations 2011 (SAST) and even a possible misuse of the FPI route.