Sebi FPI norms: The Securities Exchange Board of India had mandated FPIs holding more than 50% of their Indian equity AUM in a single Indian corporate group, or FPIs holding more than 25,000 crore of AUM in Indian markets, in 2023, to provide additional disclosures regarding their control, ownership, and economic interest।
Sebi FPI norms
According to sources, the number of foreign portfolio investors (FPIs) that may be required to provide detailed details of their beneficial ownership is expected to be much less than the estimates given in Sebi’s consultation paper and board meeting note।
As of March 31, 2023, Sebi had estimated that FPIs with assets under management (AUM) worth about 2.6 lakh crore rupees would be required to make additional disclosures।
FPIs cannot liquidate any holdings on an immediate deadline or cliff। “In concentrated FPI holdings in companies with no identified promoter, there is no risk of MPS (minimum public shareholding) violation,” sources added।
What was the SEBI mandate?
sebi fpi regulations: The Securities and Exchange Board of India (Sebi) had mandated FPIs in 2023 to hold more than 50% of their Indian equity AUM in a single Indian corporate group or holding more than 25,000 crore of AUM in Indian markets in order to provide more disclosures about their control, ownership, and economic interests। sebi fpi regulations 2023
According to Sebi, the purpose of this action is to protect investors from potential MPS rule circumvention.
“Concentrated investments give rise to the suspicion that business group promoters may be working together… If this were the case, there would be a greater chance of price manipulation in such scrips since the apparent free float of a listed firm might not be its real free float, according to Sebi.
Timelines
sebi fpi regulations 2023: October 2023 saw the initial release of the SOP that custodians adhere to for expanded disclosures and exclusions.
“FPIs that met the criteria for enhanced disclosures as of October 31, 2023, had time till January 2024 end to rebalance their holdings if they so wished,” according to sources.
sebi fpi regulations 2023: They would have an extra 10 or 30 working days to furnish the necessary additional facts if they continue to meet the requirements for enhanced disclosures as of January end. They would still have six months to sell their shares if they don’t disclose any information, the informed sources continued.
FPIs exempt from making additional disclosures
sebi fpi regulations 2023: Sovereign wealth funds, listed firms on some global exchanges, public retail funds, and other regulated pooled investment vehicles with diversified global assets are excluded from providing further disclosures.
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