Capital market regulator SEBI has approved a proposal to increase the investment threshold for granular disclosures by foreign portfolio investors (FPIs) to Rs 50,000 crore from Rs 25,000 crore. The decision was taken at the board meeting on Monday under the newly-appointed chairman Tuhin Kanta Pandey.
Currently, certain FPIs with equity assets under management (AUM) of more than Rs 25,000 crore are needed to give granular details of all their investors or stakeholders on a look-through basis.
“Cash equity market trading volumes trading volumes have more than doubled between FY 2022-23 (when these limits were set) and the
current FY 2024-25. In light of this, the board approved a proposal to increase the applicable threshold from the present Rs 25,000 crore to Rs 50,000 crore. Thus, FPIs holding more than Rs 50,000 crore of equity AUM in the Indian markets will now be required to make additional disclosures as described in the circular dated August 24, 2023,” the Securities and Exchange Board of India (SEBI) said in a release.
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“Thus, FPIs holding more than Rs 50,000 crore in equity AUM in the Indian markets will now be required to make additional disclosures,” it added.
Through a circular in August 24, 2023, the market regulator had directed FPIs with more than 50% of their equity AUM in a single corporate group to make disclosures under the additional disclosure framework.
It also directed FPIS holding more than Rs 25,000 crore of equity AUM in Indian markets to disclose details of all entities (up
to the level of natural person) holding any ownership, economic interest, or control, on a full look through basis, without any thresholds.
This was designed to guard against any potential circumvention of SEBI’s norms with respect to minimum public shareholding (MPS) and Substantial Acquisition of Shares and Takeovers (SAST).
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The circular said that it is clarified that there is no change being proposed in respect of this criteria, and the extant checks to prevent circumvention of MPS and SAST norms shall continue to apply in toto. In addition, all FPIs will continue to be liable to comply with PMLA norms as applicable.
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