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SEBI Mandates Enhance Disclosure Requirements For Certain FPIs

In pursuit of heightened transparency, the Securities and Exchange Board of India (SEBI) recently unveiled augmented disclosure prerequisites aimed at a specific category of Foreign Portfolio Investors (FPIs). These fresh obligations encompass particulars concerning ownership and economic interests. It’s worth highlighting that back in June, the regulatory body had taken the decision to enforce more detailed disclosures on ownership, economic interest, and control, focusing on designated FPIs.

In a notable move, SEBI’s amendments mandate that a foreign portfolio investor satisfying the periodically specified criteria must furnish information or documentation pertaining to individuals holding ownership, economic stake, or control within the foreign portfolio investor’s structure. The statement, as conveyed by a PTI report on Thursday, stated, “A SEBI notification outlined that the required format for the submission of these particulars or documents shall adhere to SEBI’s established guidelines.” Additionally, the regulator has made adjustments to the prerequisites for FPI eligibility.

Effective from June onward, SEBI has explicitly indicated that candidates with investors contributing a quarter (25 percent) or more to funds listed in the Sanctions List issued by the United Nations (UN) Security Council will be ineligible for registration as Foreign Portfolio Investors (FPIs), according to the report’s findings. This underscores SEBI’s commitment to enhancing oversight and compliance within the realm of foreign investment.