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Sebi Proposes Relaxing Disclosure Rules for Certain Foreign Portfolio Investors

Published On : 2024-02-28T16:28:07+0530 [ IST ] | Author : Mayur_Tembhare
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Sebi Proposes Relaxing Disclosure Rules for Certain Foreign Portfolio Investors

Sebi Proposes Relaxing Disclosure Rules for Certain Foreign Portfolio Investors



India / New Delhi :

The Securities and Exchange Board of India (Sebi) has proposed easing disclosure requirements for specific categories of investors" target="_blank">Foreign Portfolio Investors (FPIs) to enhance ease of doing business. The regulator aims to exempt certain FPIs, such as category I university funds and university-related endowments, from enhanced disclosure obligations provided they meet specific criteria.

Sebi's consultation paper suggests exempting funds with concentrated holdings in entities without a promoter group from enhanced reporting obligations if there is no risk of breaching Minimum Public Shareholding (MPS) requirements. The regulator has invited public comments on these proposals until March 8.

The move follows Sebi's decision last year to mandate FPIs to disclose detailed information about entities holding ownership, economic interest, or control in them, without any threshold. Certain FPIs were exempted from these requirements, including those with broad-based pooled structures or government ownership interest.

Under the proposed exemption, university funds and endowments registered as category I FPIs must meet specific conditions, including being listed in the top 200 ranking of QS World University Rankings, maintaining India equity AUM below 25% of global AUM, and having global AUM not exceeding Rs 10,000 crore.

Sebi aims to prevent misuse of the exemption by lesser-known universities and ensure eligibility only for well-funded and diversified funds. Additionally, Sebi considers relaxing disclosure requirements for FPIs holding concentrated positions in companies without an identified promoter, given the absence of MPS circumvention risks.

However, concerns regarding circumvention of SAST regulations persist, and Sebi proposes a 3% holding threshold for exemption from additional disclosure requirements. Custodians and depositories will monitor the utilization of this limit for companies without an identified promoter daily.


Source : SEBI


Tags : Sebi , Endowments , University Funds , Circumvention , Consultation Paper. , Disclosure Rules , Minimum Public Shareholding , Foreign Portfolio Investors ,


Summary : Sebi proposes relaxing disclosure rules for certain categories of investors" target="_blank">Foreign Portfolio Investors (FPIs) to boost ease of doing business. The proposal includes exemptions for university funds and endowments meeting specific criteria and funds with concentrated holdings in companies without an identified promoter. Sebi aims to prevent misuse and ensure eligibility based on well-defined criteria. The regulator invites public comments until March 8 on these proposals.



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