FPI will make the revelation rules easier – Sebi will make FPI disclosure rules Easier

The market regulator can increase the investment limit from Rs 25,000 crore to Rs 50,000 crore for detailed revelations of ownership of foreign portfolio investors (FPIs) from Rs 25,000 crore to Rs 50,000 crore. People aware of this matter gave this information. He said that its aim is to strengthen the FPI notion and to make the limit set in 2023 as per the market.

The decision is likely to be taken in the upcoming board meeting of the market regulator on 24 March. The meeting can also make the rules related to advance fee collection for research analysts and investment advisors at the meeting. Apart from this, alternative investment funds (AIFs) are also expected to be given some relief. SEBI did not respond until the news of the email sent for information in this regard.

This will be the first board meeting after Tuhin Kant Pandey took over earlier this month as the new chairman of SEBI. According to the FPI disclosure criteria implemented in August 2023, an asset (AUC) of more than Rs 25,000 crore or in a single business group is required to disclose an additional disclosure of ownership of FPIs with more than 50 per cent AUC.

Doubling the investment limit for FPI revelations will help reduce compliance burden and maintain transparency. This change is being made at a time when the FPI has sold about Rs 2 lakh crore from the domestic stock market during the last six months.

Vivek Sharma, partner of Cyril Amarchand Mangaldas, said, “It is a practical step to increase the investment limit in the stock market to Rs 50,000 crore, keeping the rules related to the higher investment in one group. Protection is expected by FPIs with such important investment FPIs against violations of PN3 criteria.

The PN3 or Press Note 3 implemented on 3 April 2020 is a central government rule that regulates FDI from countries with land border with India. According to this, it is necessary to get prior permission from the Government of India for any investment from other countries including China.

Another important subject of the meeting is to renew the advance fee collection range for research analysts and investment advisors. Currently, an advance fee can be collected by these professionals for a quarter. But SEBI can increase this limit for one year so that the demand of the industry can be met.

The market regulatory can make the regulations easier to invest in Category 2’s date. Also, the outline for the angel funds can also be changed. The market regulator eligible can also include recognized investors for investment in Angel Fund, expanding the definition of institutional buyers (QIB).

Nandini Pathak, partner of Bombay Law Chambers, said, ‘The process of recognizing should be done with cost, deadline and technology. In this process, fund managers should be allowed to play the role of an intermediary. Professional criteria for recognition should be included on an independent basis other than financial norms.

Market regulatory funds may also approve measures to reduce the cost of small systematic investment plan (SIP). Some asset management companies like SBI Mutual Fund and Kotak Mahindra Asset Management have already started small SIP schemes up to Rs 250. The proposed measures of SEBI will reduce the operational cost of these investment schemes.

It may have measures such as reducing mediated fees and promoting distributors. However, the schedule of SEBI’s board meeting is very busy. But sources say that the review of the ownership of Clearing Corporation and reforms related to the appointments of auditors will not be discussed in this meeting.

First Published – March 20, 2025 | 10:41 pm IST

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