SEBI Increases Disclosure Limit for FPIs to Rs 50,000 Crore
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Synopsis
The SEBI has raised the disclosure threshold for foreign portfolio investors from Rs 25,000 crore to Rs 50,000 crore. This adjustment is a response to the significant increase in trading volumes in the cash equity market.
Key Takeaways
- SEBI increases FPI disclosure threshold.
- New limit set at Rs 50,000 crore.
- Change due to rising trading volumes.
- Disclosure aims to enhance financial transparency.
- Exemptions for certain funds still apply.
Mumbai, March 24 (NationPress) The Securities and Exchange Board of India (SEBI) has officially raised the disclosure threshold for foreign portfolio investors (FPIs) from Rs 25,000 crore to Rs 50,000 crore as of Monday. This decision was made following a meeting of the SEBI board that took place earlier today.
The regulatory body indicated that this change was essential due to the significant increase in trading volumes within the cash equity market.
Since the previous threshold was established in FY 2022-23, market trading volumes have more than doubled.
Now, only FPIs with holdings exceeding Rs 50,000 crore in Indian equities will be mandated to provide further disclosures, according to a SEBI circular issued on August 24, 2023.
These disclosures aim to ensure adherence to the Prevention of Money Laundering Act (PMLA) and associated regulations.
The main goal is to avert potential investment misuse and to uphold transparency within the financial system.
"Trading volumes in the cash equity market have more than doubled between FY 2022-23 and the present FY 2024-25. Given this, the Board sanctioned a proposal to elevate the threshold from Rs 25,000 crore to Rs 50,000 crore," stated the market regulator.
Even with the increase in threshold, SEBI has not altered another crucial requirement.
FPIs will still be required to make additional disclosures if over 50 percent of their equity assets under management (AUM) are concentrated in a single corporate group.
In response to inquiries regarding the updated regulations, Chairperson Tuhin Kanta Pandey clarified that several funds, including public and sovereign funds, are already exempt from these additional disclosure requirements.
"Many funds (public, sovereign) were exempt from these additional disclosures. All FPIs are already subject to PMLA and KYC disclosures. We were just requesting more detailed disclosures," Pandey elaborated.
The market regulator also revealed modifications to investment guidelines for Category II Alternative Investment Funds (AIFs).
SEBI has relaxed the current rules, permitting investments in listed debt securities rated 'A' or below.
