Mandating additional disclosures by Foreign Portfolio Investors (FPIs) that fulfil certain objective criteria
Summary
This circular mandates Foreign Portfolio Investors (FPIs) meeting specific concentration or size criteria to disclose granular ownership and control details. It establishes exemptions for government investors, public retail funds, and certain pooled vehicles to mitigate systemic risks while ensuring transparency. Non-compliance with disclosure timelines results in account blocking, invalidation of registration, and mandatory exit from the Indian market.
Text
Granular details of all entities holding any ownership, economic interest, or exercising control in the FPI, on a full look through basis, up to the level of all natural persons, without any threshold, shall be provided by FPIs that fulfil any of the criteria mentioned below... a. FPIs holding more than 50% of their Indian equity Assets Under Management (AUM) in a single Indian corporate group; b. FPIs that individually, or along with their investor group... hold more than INR 25,000 crore of equity AUM in the Indian markets.
Government and Government related investors registered as FPIs under Regulation 5 (a) (i) of the FPI Regulations.
Public Retail Funds (‘PRFs’) as defined under Regulation 22(4) of the FPI Regulations, subject to independent validation of the same by DDPs/ Custodians.
Exchange Traded Funds (with less than 50% exposure to India and India-related equity securities) and Entities listed on specified Exchanges of the permissible jurisdictions...
Pooled investment vehicles registered with/ regulated by a Government/ regulatory authority in their home jurisdiction... where: i. their holding in an Indian corporate group is below 25% of their overall global AUM... or ii. their equity AUM in the Indian markets is below 50% of their overall global AUM...
FPIs that are unable to liquidate their excess investments due to statutory restrictions (such as lock in restrictions of anchor investors in IPOs, moratoriums, freeze on accounts or shares due to regulatory orders etc.), till the time such restrictions exist.
Newly registered FPIs, for the first 90 calendar days from the date of settlement of first trade by the FPIs in equity segment in India.
FPIs in the process of winding down their investment and having intimated to their DDP, their intention to surrender their FPI registration. Such FPIs shall be required to bring down their holdings to ‘NIL’ within 180 calendar days...
The constituents of FPI investor group which collectively hold more than INR 25,000 crore of equity AUM in the Indian markets, shall be exempted from making the additional disclosures if the investor group consists of FPIs that qualify for exemption... and the net equity AUM of the investor group, after deducting the AUM of such exempted FPIs, falls below INR 25,000 crore.
FPIs holding more than 50% of their Indian Equity AUM in a single Indian corporate group: 10 trading days from the date on which such FPIs exceed the threshold. Such FPIs shall not make fresh purchases... during the next 30 calendar days...
FPIs, including their investor group, holding more than INR 25,000 crore of equity AUM in the Indian markets: 90 calendar days from date on which such FPIs exceed the threshold. Accounts... shall be blocked for further equity purchases until the holding is brought below INR 25,000 crore...
FPIs required to make disclosures specified in Para 7 above as on the date of applicability of this circular: 90 calendar days from the date of applicability of this circular.
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Source: SecMarx — Mandating additional disclosures by Foreign Portfolio Investors (FPIs) that fulfil certain objective criteria. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.