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Indian stock market regulator SEBI (Securities and Exchange Board of India) has taken a big decision to provide relief to foreign portfolio investors (FPIs) in the board meeting held on Monday. The board has increased the limit of additional disclosure for FPIs from ₹ 25,000 crores to ₹ 50,000 crores.
Experts told CNBC Awaaz that till now foreign portfolio investors (FPIs) had to provide granular ownership disclosure on investments of more than ₹25,000 crore or more than 50% investment in a single corporate group. Now this has been changed. Under the proposed change, this limit has been increased to ₹50,000 crore.
According to experts, this will increase the confidence of FPI investors and reduce the compliance burden. In the last 6 months, FPIs have withdrawn ₹2 lakh crore, this step may pull them back. What is this disclosure rule - Till now, FPIs whose equity asset under management (AUM) in India was ₹25,000 crore or more had to share their ultimate beneficial ownership (UBO) and other information with SEBI. Its purpose was to monitor risks like money laundering and promote transparency. Now this limit has been doubled to ₹ 50,000 crore, which will exempt many large institutional investors from stringent disclosure rules. Why was this decision taken? In the last 6 months, FPIs have sold more than Rs 2 lakh crore from the Indian market. With this decision, an attempt is being made to restore confidence among them. The size of the Indian market has increased now compared to when this rule was implemented in 2023, so increasing the limit was considered logical. SEBI's aim is to reduce the compliance burden while maintaining transparency in the system. The new limit of Rs 50,000 crore is a practical move and will provide relief to those FPIs which already have strong governance and control systems.
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