Proposed additional disclosures by FPIs

PUBLISHED ON: 04-06-2023

SEBI has released a consultation paper seeking public comments by June 20, 2023 (available here), in order to prevent, the potential circumvention of minimum public shareholding norms and the misuse by Foreign Portfolio Investors (“FPIs”), to evade the requirements of Press Note 3 issued by FDI Policy Section of the Department for Promotion of Industry and Internal Trade, in 2020 (available here). The key proposals set out in the consultation paper are outlined hereunder:

• Enhanced transparency measures for identifying all holders of ownership, economic interests, and control rights to be mandated for certain objectively identified FPIs.
• Certain identified FPIs to provide granular data of all entities on a full look-through basis to the level of all natural persons and/ or public retail funds or large public listed entities.
• Any failure by such identified FPIs in providing such granular disclosures would render the FPI registration invalid and such FPIs would be required to wind down within 6 months.