The Securities and Exchange Board of India (Sebi) has eased disclosure norms for foreign portfolio investors (FPIs) by increasing the asset threshold for granular beneficial ownership disclosures from Rs 25,000 crore to Rs 50,000 crore.
This move comes in response to the significant growth in the market size, with cash equity trading volumes more than doubling between FY 2022-23 and FY 2024-25.
According to PTI report, under the new framework FPIs (either individually or as a group) holding more than Rs 50,000 crore of equity assets under management (AUM) in Indian markets are now required to disclose detailed information about all entities holding any ownership, economic interest, or exercising control, on a full look-through basis.
The revised threshold and disclosure requirements will come into effect immediately. Sebi’s board had approved this proposal last month.
In August 2023, Sebi had mandated that FPIs holding over 50% of their equity AUM in a single corporate group or with overall equity holdings exceeding Rs 25,000 crore in Indian markets disclose granular ownership details.
Certain FPIs, including those with a broad-based, pooled structure or government-related investors, are exempt from these additional disclosure requirements, subject to specific conditions.
The size criteria were introduced to prevent large FPIs from circumventing the stipulations of Press Note 3, which aims to protect the orderly functioning of the Indian securities markets by ensuring transparency and accountability in ownership and control.