Informist, Wednesday, Jun 28, 2023
–SEBI to mandate additional granular disclosures from high-risk FPIs
–SEBI: FPIs to get 3 mos to comply with additional disclosure norms
–SEBI: More FPI disclosures to address layers of holding in India cos
MUMBAI – The Securities and Exchange Board of India will soon mandate additional granular disclosures regarding ownership, economic interest, and control, of select foreign portfolio investors on a full look through basis. The decision follows approval from the SEBI board in its meeting today.
These disclosure norms will apply to FPIs holding more than 50% of their Indian equity assets in a single Indian corporate group or to FPIs that individually, or along with their investor group hold more than 250 bln rupees of equity assets in the Indian markets.
The FPIs have been given three months to comply with the additional disclosure norms.
While responding to a query from Informist in a post-board meeting press conference, SEBI Chairperson Madhabi Puri Buch said as per current data the approximate value of FPI equity holdings qualifying for additional disclosures was only less than 1% of the total market capitalisation. She did not, however, specify how many FPIs will qualify under the enhanced disclosure regime.
Buch also said that the issue of unveiling of FPI beneficial ownership has been under consideration by SEBI since the last 18 months and due to multiple stakeholders the process took time. More FPI disclosures will help address the problem of layering of FPI holdings in shares of Indian companies, she said.
The thresholds in the additional disclosure requirements will not interfere with the thresholds specified in existing definition of beneficial ownership under prevention of money laundering laws, the SEBI chief said.
“In March 2023, PML (prevention of money laundering) Rules threshold requirements for identification of BO (beneficial owners) were amended and currently stand at 10% for companies and trusts…” SEBI said in a statement. The SEBI board today approved changes to the FPI regulations for aligning the norms with the reduced threshold under prevention of money laundering rules.
The additional disclosures will not apply to FPIs which include government and government related investors, pension funds and public retail funds, certain listed ETFs, corporate entities and verified investment vehicles meeting certain conditions. End
Reported by Rajesh Gajra
Edited by Maheswaran Parameswaran
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