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SEBI enhances disclosure requirements for FPIs FPIs
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SEBI enhances disclosure requirements for FPIs

India Blooms News Service | @indiablooms | 12 Aug 2023, 02:32 am

Mumbai: In an effort to enhance transparency, the Securities and Exchange Board of India (Sebi) has introduced stricter disclosure requirements for a specific category of Foreign Portfolio Investors (FPIs).

These requirements entail providing comprehensive information about ownership and economic interests. Furthermore, SEBI has made adjustments to the criteria that determine the eligibility of FPIs.

The required information or documents will be provided as specified by the Securities and Exchange Board of India (SEBI).

Furthermore, applicants whose investors contribute 25 percent or more to the corpus and are listed in the Sanctions List by the United Nations (UN) Security Council are not eligible for FPI registration, as stated by the regulator in June.

Amendments to the Prevention of Money Laundering (PML) Rules were made in March to establish threshold requirements for identifying Beneficial Owners (BO) in FPIs. The revised thresholds are 10 percent for companies and trusts, and 15 percent for partnerships, unincorporated associations, or bodies of individuals.

BOs are individuals who ultimately own or control an FPI and are identified following the guidelines of the PML Rules.

SEBI has modified the rules to align FPI eligibility criteria with those specified in the PML rules.

These rules apply to entities listed in the Sanctions List issued by the UN Security Council.

"A foreign portfolio investor that fulfills the criteria specified by the board from time to time shall provide information or documents in relation to the persons with any ownership, economic interest or control, in the foreign portfolio investor," SEBI said in a notification amending the rules on Thursday.

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