Sebi mulls easing deep disclosures for FPIs

In a bid to stem the ebbing tide of foreign portfolio investment (FPI) flows on Dalal Street, the Securities and Exchange Board of India (Sebi) is reviewing the granular disclosure framework pertaining to ultimate beneficial ownership for FPIs, originally introduced in August 2023, including the mandate that they must invest in at least three Indian stocks.

- KHUSHBOO TIWARI

According to sources aware of the development, Sebi may consider allowing FPIs to invest in a single stock, as against the existing requirement of holding at least three stocks in India, a condition that has raised concerns among some overseas investors. The regulator is also holding parleys for a possible change in the ownership threshold for stipulating the identification of ultimate beneficiary owners (UBOs).

Sebi had also mandated that FPIs holding more than 50 per cent of their Indian equity assets under management (AUM) in a single corporate group would have to share additional granular disclosure requirements. This, combined with the prescription on number of stocks to be held, posed a greater challenge for managers of foreign funds.

Last April, Sebi had eased the granular disclosure norms by doubling the asset threshold to ₹50,000 crore from an earlier tipping point of ₹25,000 crore. This meant FPIs holding over ₹50,000 crore of equity AUM in Indian markets were required to disclose details of all entities holding ownership, economic interest, or control, on a full-look-through basis.