The board of capital market regulator SEBI on March 24 approved a proposal to double the threshold in terms of AUM for detailed disclosure by foreign portfolio investors (FPIs) to Rs 50,000 crore. Till now, FPIs with assets under management (AUM) of more than Rs 25,000 crore were required to provide detailed details of all their investors or stakeholders on a look through basis. SEBI Chairman Tuhin Kant Pandey said after the meeting, "Trading volumes in cash equity markets have more than doubled between FY 2022-23 and the current financial year 2024-25. Keeping this in mind, the board has approved the proposal to increase the applicable threshold from the current Rs 25,000 crore to Rs 50,000 crore."
Pandey further said, "Thus, FPIs having more than Rs 50,000 crore equity AUM in Indian markets will now need to make additional disclosures." Pandey is the new chairman of SEBI. This was the first meeting of the board under his leadership.
What rule was brought in August 2023
In August 2023, SEBI had directed FPIs holding more than 50 per cent of their equity AUM in a single corporate group or having an aggregate exposure of more than Rs 25,000 crore in Indian equity markets to disclose detailed information of all entities that have ownership, economic interest or control in the FPI. However, certain FPIs are exempted from such additional disclosure requirements under certain conditions. These include broad-based, pooled structured or FPIs with a wide investor base and ownership interest from the government or government-linked investors.
Other decisions of the meeting
Apart from this, SEBI also decided to form a high-level committee to comprehensively review the disclosures related to conflict of interest, assets, investments and liabilities of board members and officials. The committee will have to submit its recommendations within 3 months from the date of formation. This report will be placed before the board of SEBI for consideration. The committee will include eminent persons and experts having relevant background and experience in constitutional or statutory or regulatory bodies, government / public sector, private sector and education world.
SEBI has also decided to allow investment advisors and research analysts to charge advance fees for up to one year. Under the current rules, investment advisors (IAs) can charge advance fees for up to two quarters if the client agrees. For research analysts (RAs), this period was only one quarter.
