The Securities and Exchange Board of India (SEBI) on August 24, 2023, issued a notification regarding Mandating additional disclosures by Foreign Portfolio Investors (FPIs) that fulfill certain objective criteria.
The following has been stated namely: -
• The FPIs are liable to provide information or documents in relation to the persons with any ownership, economic interest, or control, in the FPI.
• Granular details of all entities holding any ownership, economic interest, or exercising control in the FPI, on a full look-through basis, up to the level of all natural persons, without any threshold, shall be provided by FPIs that fulfill any of the criteria as prescribed to the respective DDPs in the specified format
• FPIs satisfying any of the certain criteria shall not be required to make the disclosures, criteria include: -
1. Government and Government related investors registered as FPIs
2. Public Retail Funds (‘PRFs’) subject to independent validation of the same by DDPs/Custodians
• The constituents of the FPI investor group which collectively hold more than INR 25,000 crore of equity AUM in the Indian markets, shall be exempted from making the additional disclosures if the investor group consists of FPIs that qualify for exemption in terms of any of the criteria and the net equity AUM of the investor group, after deducting the AUM of such exempted FPIs, falls below INR 25,000 crore
• Timelines for the following have been stated: -
1. FPIs holding more than 50% of their Indian Equity AUM in a single Indian corporate group
2. FPIs, including their investor group, holding more than INR 25,000 crore of equity AUM in the Indian markets
3. FPIs are required to make disclosures as specified as of the date of applicability of this circular.
• FPIs whose investments continue to exceed the prescribed threshold post-expiry of timelines shall make the disclosures to their DDPs within 30 trading days from the expiry of such timelines. Non–disclosures in this regard shall render the registration of the FPI invalid and the FPI shall not make any further purchases. Further, the FPI shall liquidate its securities and exit the Indian securities market by surrendering its FPI registration within 180 calendar days from the day the certificate becomes invalid.
This shall come into force on November 01, 2023.
[Notification No. SEBI/HO/AFD/AFD-PoD-2/CIR/P/2023/148]
