Sebi doubles FPI disclosure threshold to ₹50,000 crore, to review conflict of interest provisions

Indian securities market regulator, the Securities and Exchanges Board of India (SEBI), on Monday, March 24, approved the proposal to double the investment threshold for foreign portfolio investors (FPI) disclosures to ₹50,000 crore, reported the news agency PTI.

“Cash equity markets' trading volumes have more than doubled between FY 2022-23 and the current FY 2024-25. In light of this, the board approved a proposal to increase the applicable threshold from the present ₹25,000 crore to ₹50,000 crore,” said Tuhin Kanta Pandey, Chairman of SEBI.

SEBI's move is aimed at changing the stock market dynamics without altering the concentration criteria, reported PTI. As of March 24, certain FPIs with assets under management (AUM) of more than ₹25,000 crore are required to provide granular details of all their investors or stakeholders on a look-through basis.

“Thus, FPIs holding more than ₹50,000 crore in equity AUM in the Indian markets will now be required to make additional disclosures,” said the SEBI Chief.

Review Committee

The markets regulator, SEBI has also decided to set up a high-level committee to review the conflict of interest and disclosures related to the property, investments, and liabilities of board members and officials.

The high-level SEBI review committee is expected to submit its recommendation within three months from the date of the constitution. The recommendations will then be placed in front of the board of directors for consideration.

The report also highlighted that the committee will have distinguished personnel and experts with relevant backgrounds and experience in constitutional or statutory or regulatory bodies, government/ public sector, private sector and academia.

The names of the committee members have not been disclosed yet, but the newly appointed Sebi Chairperson Tuhin Kanta Pandey told the media outlets that it will be announced in due course.

“The objective of the high-level committee is to comprehensively review and make recommendations for enhancing the existing framework for managing conflict of interest, disclosures and related matters towards ensuring the high standard of transparency, accountability and ethical conduct of members and officials of the board,” said the SEBI Chairman, cited the news agency.

This move from the Indian stock market regulator comes forth after the previous allegations emerged of an alleged conflict of interest from the former SEBI Chairperson Madhabi Puri Buch involved in the Hindenburg Research, Adani Group issue.

In 2024, the US-based short seller Hindenburg Research claimed that SEBI's unwillingness to act against the Adani Group of companies may be due to Buch's stake in offshore funds linked to the conglomerate.