In a recent meeting, the Securities and Exchange Board of India (SEBI) decided to double the threshold assets under management (AUM) of foreign portfolio investors (FPIs) required to make additional disclosures to ₹50,000 crore. This means that only FPIs holding more than ₹50,000 crore in equity AUM in the Indian markets will need to make additional disclosures, marking a significant easing of regulations for foreign investors.
Currently, under the Prevention of Money Laundering Act, FPIs with more than ₹25,000 crore in equity AUM are required to disclose details of all entities with ownership or control interests. This was put in place to prevent potential circumvention of regulations by large FPIs that could disrupt market functioning.
Recognizing the significant increase in cash equity trading volumes since the limits were set in FY23, the SEBI board decided to double the threshold. Trading volumes have doubled since then, prompting the adjustment.
While the threshold for disclosure has been increased, the criteria for FPIs holding more than 50% of their equity AUM in a single corporate group remains unchanged. All FPIs must still comply with PMLA norms.
The easing of additional disclosure requirements for FPIs reflects SEBI’s efforts to streamline regulations and facilitate foreign investment in the Indian markets.
