Mumbai: The Securities and Exchange Board of India (Sebi) has relaxed its rules for foreign portfolio investors, alternative investment funds, and registered investment advisors amid increasing cash equity market trading volumes.
In its first board meeting under new chairperson Tuhin Kanta Pandey on Monday, India’s markets regulator increased the investment threshold for granular ownership disclosures by foreign portfolio investors (FPIs) from ₹25,000 crore to ₹50,000 crore.
Sebi had in August 2023 made it mandatory for FPIs holding more than ₹25,000 crore worth of assets under management (AUMs) in Indian markets to disclose details of all entities holding any ownership, economic interest, or control.
This August 2023 circular was introduced to guard against any potential circumvention of Press Note-3 rules, which require all investments from countries that share a land border with India to be cleared by the Union government.
Pandey clarified that the disclosure requirement remained unchanged for foreign portfolio investors holding more than 50% of their equity assets under management in India.
Relaxations for AIFs
The Securities and Exchange Board of India on Monday also permitted Category II alternative investment funds (AIFs) to invest a larger portion of their assets in listed debt securities with credit ratings of ‘A’ or below, and registered investment advisors to collect up to one year’s fee in advance, reversing the previous three-month limit.
In another significant move, the markets regulator decided to constitute a high-level committee (HLC) to undertake a comprehensive review of provisions relating to conflict of interest, disclosures pertaining to property, investments, liabilities, and other related matters in respect of its members and officials.
“The HLC shall comprise of eminent persons and experts with relevant background and experience in constitutional/statutory/regulatory bodies, government/public sector, private sector and academia. The names of the HLC members will be announced in due course,” the markets regulator said in a statement.
