Sebi eases FPIs' disclosure norms; doubles assets threshold to Rs 50,000 cr

Easing the disclosure norms for foreign portfolio investors (FPIs), markets regulator Sebi on Wednesday 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, the Securities and Exchange Board of India (Sebi) said in a circular.

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.

The new framework will come into force with immediate effect, Sebi added.

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.

The size criteria were specified with a view to guarding against the potential circumvention of Press Note 3 stipulations by FPIs with large Indian equity portfolios, with the potential to disrupt orderly functioning of Indian securities markets by their actions.