Amendment To Circular For Mandating Additional Disclosures By FPIs That Fulfil Certain Objective Criteria

SEBI has issued a new circular, “Master Circular for Foreign Portfolio Investors, Designated Depository Participants and Eligible Foreign Investors”, with number SEBI/HO/AFD/AFD-PoD2/P/CIR/P/2024/70 on May 30, 2024. The circular discusses about the extra disclosure rules for FPIs. Before, FPIs, individually or along with their investor group, were required to submit additional details if their investments in Indian equity markets were above Rs. 25,000 crore. These disclosures aimed to ensure transparency and prevent misuse, such as hiding real ownership or engaging in round-tripping.

With the latest changes, SEBI has made an increment in this limit from Rs. 25,000 crore to Rs. 50,000 crore. Now, only those FPIs whose total equity investments in India cross Rs. 50,000 crore need to comply with the enhanced disclosure requirements. This change also applies to investors using Offshore Derivative Instruments (ODIs).

The circular, which updates relevant sections of SEBI’s FPI Master Circular, is effective immediately. The move is intended to reduce the compliance burden on smaller FPIs while keeping a close watch on large investors that have greater influence on the market. SEBI has made this change under its authority granted by the SEBI Act, 1992 and the SEBI (FPI) Regulations, 2019.

For more information, read the official circular