After the Adani-Hindenburg saga, Sebi asks high-risk FPIs with concentrated holdings to make more disclosures
Sebi said that Foreign Portfolio Investors (FPIs) that have either concentrated single group exposures and or significant overall holdings in their India equity investment portfolio, will be subjected to it
PremiumThe market regulator, Securities and Exchange Board of India (Sebi) has mandated additional disclosures for Foreign Portfolio Investors (FPIs) to prevent violation of Minimum Public Shareholding rules and to guard against possible misuse of the FPI route for opportunistic takeover of Indian companies.
In its consultation paper, Sebi said that Foreign Portfolio Investors (FPIs) that have either concentrated single group exposures and or significant overall holdings in their India equity investment portfolio, will be subjected to it.
The market regulator has proposed that for now, high-risk FPIs, holding more than 50 percent of their equity assets under management in a single corporate group would have to comply with the requirements of additional disclosures up to the level of all natural persons and/ or Public Retail Funds or large public listed entities.
“Such concentrated investments raise the concern and possibility that promoters of such corporate groups, or other investors acting in concert, could be using the FPI route for circumventing regulatory requirements such as that of maintaining Minimum Public Shareholding (MPS). If this were the case, the apparent free float in a listed company may not be its true free float, increasing the risk of price manipulation in such scrips," the consultation paper said.
SEBI has proposed that existing high-risk FPIs with an overall holding in Indian equity markets of over Rs. 25,000 crore shall also be required to comply with additional granular disclosure requirements within 6 months, failing which the FPI should bring down its AUM ₹25,000 crore within that time frame.
“The additional disclosure would include granular data of all entities with any ownership, economic interest, or control rights on a full look –through basis, up to the level of all natural persons and/ or Public Retail Funds or large public listed entities. Further, any material change in the same also needs to be communicated by the FPIs to their designated depositary participants within 7 working days of such change," said Sebi in its paper.
"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!
