The Securities and Exchange Board of India (SEBI) is considering changes to its disclosure requirements for foreign portfolio investors (FPIs). In 2023, SEBI tightened regulations to address concerns about FPIs potentially using concentrated investments to bypass rules, particularly those with connections to investors from land-bordering countries (LBCs). However, recognising the operational challenges this posed for some FPIs, SEBI has now proposed a more streamlined, risk-based approach.
Key Proposed Changes:
– Risk-Based Threshold: FPIs would be categorised as LBC or non-LBC based on the origin of entities holding a majority economic interest in the FPI.
– Simplified Disclosures: Granular disclosures would only be required if neither LBC nor non-LBC entities meet the majority threshold.
This proposed change is a positive step towards easing operational burdens for FPIs and promoting ease of business in India. By adopting a risk-based approach, SEBI aims to streamline the disclosure process while addressing regulatory concerns.
Read this article authored by Ankit Bhasin and Akshita Mittal: https://lnkd.in/g7SgGjeB
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