Sebi relaxes additional disclosure norms for FPIs with few riders

An FPI having over 50% of its Indian equity assets under management (AUM) in a corporate group has been exempted from making additional disclosures subject to three conditions.

First, the apex company of such a corporate group should have no identified promoter. Secondly, the FPI holding should not be more than 50% of its Indian equity AUM in the corporate group, after disregarding its holding in the apex company. The third condition is that the composite holdings of all such FPIs in the apex company are less than 3% of the total equity share capital of the apex company.

The regulator has directed custodians and depositories to track the utilisation of this 3% limit for apex companies, without an identified promoter, at the end of each day.

“When the 3% limit is met or breached, depositories shall make this information public before the start of trading on the next day,” Sebi said.

Further, for any prospective investment in the apex company by FPIs that meet the 50% concentration criteria in the corporate group, FPIs will be required to either realign their investments below the 50% threshold within 10 trading days or make additional disclosures prescribed in the August circular.

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