FPIs seek exemption from stricter disclosure norms

Sebi wants that FPls with more than 50% of portfolio in one entity be termed high-risk.

- Pavan Burugula

Foreign portfolio investors (FPIs) are seeking exemption for unintended or passive breaches of the stricter disclosure norms proposed by the Indian markets regulator.

Last month, the Securities and Exchange Board of India (Sebi) proposed that any FPI with more than 50% of its portfolio invested in a single corporate group in India be termed ‘high risk’, and that such funds must submit granular data on their end investors.

In a letter to Sebi dated 20 June, the FPI lobby group Asia Securities Industry and Financial Markets Association (Asifma) said the 50% rule might impact long-only FPIs that do not actively trade in the market. The lobby group, representing the interests of leading offshore investors, such as JP Morgan, Goldman Sachs, and Blackrock, requested Sebi to make the 50% rule applicable only if the threshold has been breached due to incremental new buying by an FPI in a single corporate group.