SEBI Amends Rules; Enhances Disclosure Requirements For Certain FPIs

Applicants with investors contributing 25 per cent or more in the corpus that are mentioned in the Sanctions List by United Nations (UN) Security Council are ineligible for registration as FPIs, the regulator had said in June
SEBI.
SEBI.

To ensure greater transparency, SEBI has mandated enhanced disclosures for a certain class of Foreign Portfolio Investors (FPIs), including furnishing details about ownership and economic interests.

In addition, the regulator has tweaked rules pertaining to the eligibility criteria for FPIs.

"A foreign portfolio investor that fulfils the criteria specified by the board from time to time shall provide information or documents in relation to the persons with any ownership, economic interest or control, in the foreign portfolio investor," SEBI said in a notification amending the rules on Thursday.

The information or documents will be provided in the manner specified by the Securities and Exchange Board of India (SEBI).

Further, applicants with investors contributing 25 per cent or more in the corpus that are mentioned in the Sanctions List by United Nations (UN) Security Council are ineligible for registration as FPIs, the regulator had said in June.

The Prevention of Money Laundering (PML) Rules threshold requirements for identifying Beneficial Owners (BO) in FPIs were amended in March. Subsequently, the threshold is 10 per cent for companies and trusts, and 15 per cent for partnerships and unincorporated associations or bodies of individuals.

BOs are the natural persons who ultimately own or control an FPI and are identified in accordance with the PML Rules.

The rules have been amended by SEBI to align the eligibility criteria for FPIs with the one prescribed under the PML rules.
    
In its notification, SEBI has tweaked rules pertaining to the eligibility criteria for FPIs as it has substituted the 25 per cent or more clause with more than the threshold prescribed under the Prevention of Money Laundering (Maintenance of Records) Rules, 2005.

The rules pertain to entities that are mentioned in the Sanctions List notified by the UN Security Council.

Meanwhile, SEBI has amended settlement proceedings rules.

"In case of specified proceedings which may be initiated or are proposed to be initiated, the Panel of Whole Time Members shall dispose of such proceedings on the basis of the approved settlement terms," SEBI said in a separate notification on Thursday.

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