Sebi issues disclosure norms for FPIs holding high Indian equity AUM

Sebi on Thursday laid down timelines for providing additional disclosures by foreign portfolio investors (FPIs) that meet certain criteria.

FPIs holding more than 50 per cent of their Indian equity AUM in a single Indian corporate group have 10 trading days within which they can bring down their holdings. After this, they need to make additional disclosures regarding persons having any ownership, economic interest, or control.

Such FPIs will not make fresh equity purchases of any company belonging to the corporate group during the next 30 calendar days from the date of exceeding the threshold.

FPIs holding more than ₹25,000-crore of equity AUM in the Indian markets have 90 calendar days to bring down their holding, post which they will have to make the additional disclosures. Accounts of all such FPIs will be blocked for further equity purchases until the holding is brought below ₹25,000 crore.

FPIs whose investments continue to exceed the prescribed threshold after the expiry of above timelines will be given 30 trading days to make disclosures, post which the FPI registration will become invalid. The FPI will then liquidate its securities and exit the Indian securities market by surrendering its registration within 180 calendar days from the day the certificate becomes invalid.

During these 180 days, the investee companies will restrict the FPIs’ voting rights to its actual shareholding or its shareholding corresponding to 50 per cent of its equity AUM on the date its FPI registration is rendered invalid, whichever is lower.

The new disclosure norms will come into effect from November 1.

The regulator had released a consultation paper on the same on May 31.