In a key decision aimed at maintaining transparency and regulatory discipline in Indian markets, the Securities and Exchange Board of India (SEBI) has chosen to retain the requirement for foreign portfolio investors (FPIs) to disclose their ownership when more than 50% of their equity Assets Under Management (AUM) is concentrated in a single corporate group. The rule, first introduced as part of SEBI’s 2023 disclosure reforms, continues to form a critical part of the market watchdog’s efforts to safeguard against circumvention of key ownership norms.
At its 209th board meeting held in Mumbai, SEBI reiterated that FPIs with significant concentration in a single group must comply with enhanced disclosure obligations under the additional disclosure framework. These disclosures include granular details on ownership, economic interest, and control—right down to the level of the natural person.
This rule is specifically designed to ensure compliance with the Minimum Public Shareholding (MPS) norms and the Substantial Acquisition of Shares and Takeovers (SAST) regulations, both of which aim to protect market integrity and prevent indirect promoter control through opaque investment structures.
SEBI clarified in its press release that no changes are being made to the 50% group-level concentration threshold, and the existing framework will continue to apply. The regulator reaffirmed its commitment to prevent any structuring that could potentially bypass key regulatory guardrails—especially in cases where FPIs are used as vehicles for concentrated promoter interests.
This comes alongside SEBI’s approval to double the threshold for size-based FPI disclosures from ₹25,000 crore to ₹50,000 crore, recognizing the significant growth in equity market volumes over the past two years. However, by keeping the group-level concentration rule unchanged, SEBI signals that it remains vigilant against any attempt to mask control or exert undue influence through large FPI holdings
