Sebi Eases FPI, AIF Rules; Conflicts of Interest Under Lens

India's markets regulator has relaxed its rules for foreign portfolio investors (FPIs), alternative investment funds (AIFs) and registered investment advisors, amid increasing cash equity market trading volumes.

- Neha Joshi

Alongside, the Securities and Exchange Board of India (Sebi) will also review several provisions relating to conflict of interest and related matters pertaining to its members and officials.

In its first board meeting under new chairman Tuhin Kanta Pandey on Monday, Sebi increased the investment threshold for granular ownership disclosures by foreign portfolio investors (FPIs) from ₹25,000 crore to ₹50,000 crore.

The regulator also permitted Category II AIFs to invest a larger portion of their assets in listed debt securities with credit ratings of 'A' or below, and registered investment advisors or RIAs to collect up to one year's fee in advance, reversing the previous three-month limit.

To be sure, Pandey clarified at a media briefing after the board meeting that disclosure requirements remained unchanged for FPIs holding more than 50% of their equity assets under management (AUMs) in India.

Sebi had in August 2023 made it mandatory for FPIs holding more than ₹25,000 crore worth of AUMs in Indian markets to disclose details of all entities holding any ownership, economic interest, or control.