At 50,000 crore, SEBI doubles FPI investment threshold for granular disclosures

With an aim to address the changing market dynamics without altering the concentration criteria, which remain unchanged, market regulator SEBI’s board on Monday approved a proposal to double the investment threshold for granular disclosures by foreign portfolio investors (FPIs) to Rs 50,000 crore.

This will benefit certain FPIs with equity assets under management (AUM) exceeding Rs 25,000 crore, who are required to provide granular details of all their investors or stakeholders on a look-through basis.

Disclosing this, SEBI Chairman Tuhin Kanta Pandey, after chairing his maiden board meeting, said cash equity markets’ trading volumes have more than doubled between FY 2022-23 and the current FY 2024-25. In light of this, the board approved a proposal to increase the applicable threshold from the present Rs 25,000 crore to Rs 50,000 crore.

He said FPIs holding more than Rs 50,000 crore in equity AUM in the Indian markets will now be required to make additional disclosures.

SEBI had in August 2023 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.

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

With the potential to disrupt orderly functioning of Indian securities markets by their actions, the size criteria were specified with a view to guarding against the potential circumvention of stipulations by FPIs with large Indian equity portfolios.