The Securities and Exchange Board of India (Sebi) has proposed stricter disclosure norms for certain foreign portfolio investors (FPIs) to bring in more transparency and trust against the backdrop of the Adani-Hindenburg Research saga.
Under the new norms, FPIs with an exposure of more than 50 per cent to a single group or with assets of over ₹25,000 crore will be tagged as high risk’ and will be required to provide additional information such as full identification of their ownership, economic interests, and control rights. A failure to provide these disclosures will lead to invalidation of the FPI registration.
The move is to address concerns that certain promoters may be cornering additional shares to bypass the minimum public shareholding (MPS) norms.
“Such concentrated investments raise the concern and possibility that promoters of such corporate groups, or other investors acting in concert, could be using the FPI route for circumventing regulatory requirements such as that of maintaining MPS,” Sebi said in a consultation paper on Wednesday.
This story is from the June 01, 2023 edition of Business Standard.
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This story is from the June 01, 2023 edition of Business Standard.
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