The Securities and Exchange Board of India (SEBI), in its board meeting held in Mumbai, approved a significant amendment to its disclosure norms for foreign portfolio investors (FPIs), effectively doubling the existing threshold from ₹25,000 crore to ₹50,000 crore in equity Assets Under Management (AUM). The move is aimed at strengthening oversight and ensuring transparency in ownership patterns within India’s capital markets.
As per the updated regulations, FPIs holding more than ₹50,000 crore of equity AUM in Indian markets will now be required to disclose the details of all entities (down to the natural person level) holding ownership, economic interest, or control. This is in line with SEBI’s August 24, 2023 circular, which initially mandated these disclosures to guard against circumvention of Press Note 3 stipulations that prevent potential disruption by large FPIs.
SEBI clarified that the requirement to disclose ultimate beneficial ownership, irrespective of thresholds, is intended to protect the orderly functioning of the markets and prevent large investors from evading key regulatory norms. The move comes as cash equity trading volumes have more than doubled since FY2022-23, necessitating enhanced surveillance and governance over large market participants.
Further, SEBI noted that the earlier requirement for disclosure when an FPI held over 50% of its AUM in a single corporate group still remains intact, with no changes made. This criterion is specifically designed to ensure compliance with the Minimum Public Shareholding (MPS) rule and Substantial Acquisition of Shares and Takeovers (SAST) norms.
