Easing the disclosure norms for foreign portfolio investors
(FPIs), markets regulator -- the Securities and Exchange Board of India (Sebi)
has doubled the asset threshold to Rs 50,000 crore for making granular
beneficial ownership disclosures. The decision has been taken amid an increase
in the market size. Cash equity markets' trading volumes have more than doubled
between FY 2022-23 and FY 2024-25. Accordingly, it has been decided to increase
the threshold under size criteria from Rs 25,000 crore to Rs 50,000 crore.
Now, FPIs (individually or as an investor group), holding
more than Rs 50,000 crore of equity AUM in Indian markets are required to
disclose details of all entities holding any ownership, economic interest, or
control, on a full look through basis. It added the new framework will come
into force with immediate effect. Last month, the board of Sebi approved a
proposal in this regard.
In August 2023, Sebi had directed FPIs, who were holding
over 50 per cent of their equity AUM in a single corporate group or with an
overall holding in Indian equity markets of more than Rs 25,000 crore, to
disclose granular details of all entities holding any ownership, economic
interest, or exercising control in the FPI.
Certain FPIs, including those having a broad-based, pooled
structure with widespread investor base or those having ownership interest by
the government or government-related investors have been exempted from such
additional disclosure requirements, subject to certain conditions.
Source: Ace Equity
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