Sebi Proposes New Guidelines for Foreign Portfolio Investors

The Securities and Exchange Board of India (Sebi) has proposed new guidelines to ease the disclosure requirements for certain foreign portfolio investors (FPIs). This includes a risk-based threshold for identifying and categorising FPIs as entities from land bordering countries (LBC) or non-LBC entities, instead of the current rule mandating disclosure of all interest owners.

In a move to streamline business operations, Sebi introduced proposed modifications to the disclosure framework for foreign portfolio investors (FPIs) on Tuesday.

The regulatory body has suggested implementing a risk-based threshold for identifying and categorising FPIs. This new approach targets determining whether FPIs are from land bordering countries (LBC) or non-LBC entities.

Under existing rules, FPIs with over Rs 25,000 crore in assets must disclose granular investor details. The proposal seeks to simplify this by setting risk-based criteria instead of mandating exhaustive disclosures for all interest owners.

Sebi's consultation paper highlights the compliance challenges faced by large funds. The proposed guidelines aim to balance regulatory objectives with improving ease of investment, potentially attracting more foreign capital into India.

(With inputs from agencies.)