FPIs: Sebi plans hiking threshold to Rs 50,000 crore for making granular disclosures

Sebi on Friday proposed doubling the threshold amount to Rs 50,000 crore for foreign portfolio investors to make granular disclosures about their investors holding any ownership or economic interest. At present, certain foreign portfolio investors (FPIs) with equity assets under management (AUM) exceeding Rs 25,000 crore are required to provide granular details of all their investors or stakeholders on a look-through basis.

The norms are aimed at preventing the possible round-tripping by certain promoters using the FPI route.

Data for average daily turnover in the capital market segment at NSE increased 122 per cent to Rs 1,18,757 crore in FY 2024-25 (till December 2024) from Rs 53,434 crore in FY 2022-23.

"Considering the increase in market turnover, it is proposed to increase the size criteria from the present Rs 25,000 crore to Rs 50,000 crore," Sebi said in its consultation paper.
The Securities and Exchange Board of India (Sebi) has sought public comments on the proposal till January 31.

In August 2023, Sebi directed FPIs, who were holding over 50 per cent of their equity AUM in a single corporate group or with an overall holding in Indian equity markets of more than Rs 25,000 crore, to disclose granular details of all entities holding any ownership, economic interest, or exercising control in the FPI.

Certain FPIs, including those having a broad-based, pooled structure with widespread investor base or those having ownership interest by Government or government-related investors have been exempted from such additional disclosure requirements, subject to certain conditions.

The size criteria was specified with a view to guard against the potential circumvention of Press Note 3 stipulations by FPIs with large Indian equity portfolios, with the potential to disrupt orderly functioning of Indian securities markets by their actions.