SEBI Enhances Disclosures For Foreign Portfolio Investors

The Securities and Exchange Board of India has approved additional granular level disclosures regarding ownership, economic interest, and control for foreign portfolio investors meeting certain criteria, on a full look-through basis.

The regulator's decision is in line with the proposals floated by it in May this year.

The enhanced disclosures are aimed at addressing possible circumvention of Minimum Public Shareholding and Takeover Regulations, SEBI said.

This issue of FPI beneficial ownership and its implications is a year-and-a-half old issue and has been in discussion internally and externally, Madhabi Puri Buch, chairperson of SEBI said, at a press conference that followed the board meeting.

Buch said the issue is equally applicable in respect of Minimum Public Shareholding for domestic investors, but SEBI has powers to go through various layers for them. "SEBI required this for foreign jurisdictions," she said, highlighting that FPIs will need to waive off privacy laws of domicile country.

Existing FPIs will have three months to bring down their positions and new FPIs will have three months to meet the disclosure requirements.

The board has now said that the higher disclosure requirement will apply to:

• FPIs holding more than 50% of their Indian equity assets under management in a single Indian corporate group.

• Individual FPIs or FPIs along with their investor group holding more than Rs 25,000 crore of equity AUM in the Indian markets.

However, certain entities have been exempt. These include government and government-related investors, pension and public retail funds, certain listed ETFs, corporate entities and verified pooled investment vehicles meeting certain conditions.