The Securities and Exchange Board of India on Monday raised the disclosure threshold for foreign portfolio investors to Rs 50,000 crore from Rs 25,000 crore in equity assets under management in Indian markets.
The decision was made during SEBI's first board meeting under its new chairperson, Tuhin Kanta Pandey.
"Average trade volume in the cash market has increased 122% since 2022," Pandey said during the briefing. "Taking that into consideration, the size criterion is being revised to Rs 50,000 crore. The concentration criterion remains the same, that is, 50%, irrespective of size," he added.
The August 2023 circular had mandated FPIs holding over 50% of their equity AUM in a single corporate group to disclose details under an additional framework. SEBI clarified that these norms remain unchanged to prevent the circumvention of minimum public shareholding and substantial acquisition of shares and takeovers regulations.
SEBI stated that all FPIs must continue complying with Prevention of Money Laundering Act norms. It also emphasised that the rise in cash equity market trading volumes since the fiscal year 2022-23 justified increasing the FPI disclosure threshold.
"The disclosure norms were not updated to see how many FPIs we can help in the process," Whole-Time Member Ananth Narayan explained. "Our entire point about requiring certain large FPIs to disclose more was to see if there is a potential to disrupt markets, which is a function of what the depth is in the market," he explained.
Many sovereign and public funds are already exempt from FPI disclosure requirements, Pandey said in a media conference after the board meeting, adding that KYC and PMLA disclosures remain applicable for all FPIs, with the proposal ensuring more granular disclosures.
SEBI, in its board meeting, also approved a decision to form a high-level committee to review provisions related to conflict of interest, disclosures, and related matters concerning its board members and officials.
Pandey, a former finance and revenue secretary, took charge as SEBI's chairperson for a three-year term earlier this month.
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