The Securities and Exchange Board of India (SEBI) approved a package of measures from its board meeting, including raising the asset-size threshold that triggers enhanced foreign portfolio investor (FPI) ownership disclosures, adjusting Category II alternative investment fund (AIF) investment rules, updating governance requirements for market infrastructure institutions (MIIs), and easing advance-fee restrictions for investment advisers (IAs) and research analysts (RAs). The Board also deferred previously approved structural amendments for certain intermediaries and decided to constitute a high-level committee to review conflict-of-interest and disclosure requirements for SEBI’s own members and officials. Under the additional disclosure framework, the equity assets under management threshold for FPIs required to provide full look-through ownership, economic interest, and control disclosures up to the level of natural persons will increase to INR 50,000 crore from INR 25,000 crore, while the existing criterion tied to concentration of more than 50% of equity AUM in a single corporate group remains unchanged. For Category II AIFs, investments in listed debt securities rated ‘A’ or below will be treated as akin to unlisted investments for the purpose of meeting minimum unlisted investment conditions. In MIIs, SEBI will continue to approve Public Interest Director (PID) appointments without shareholder approval, require MIIs to record and communicate to SEBI the rationale for not re-appointing a PID after a first term, stop prescribing a cooling-off period for PIDs moving between MIIs while allowing MII governing boards to set cooling-off for their key management personnel and directors, and shift approval of appointment, re-appointment, or termination of specified key roles (Compliance Officer, Chief Risk Officer, Chief Technology Officer, and Chief Information Security Officer) in designated verticals from the nomination and remuneration committee to the governing board. For IAs and RAs, advance fees may be charged for up to one year if agreed by the client, and specified fee-related provisions will apply only for individual and Hindu undivided family clients who are not accredited investors. Implementation of earlier-approved amendments that would have required merchant bankers, debenture trustees, and custodians to carry out other regulated activities through a separate legal entity (within two years of notification) has been deferred, with revised proposals to be brought to a forthcoming Board meeting after internal review. The planned High-Level Committee will comprise external experts, have its membership announced later, and is expected to submit recommendations within three months of its constitution for consideration by the SEBI Board.
Securities & Exchange Board of India 2025-03-24
Securities and Exchange Board of India doubles large-FPI disclosure trigger to INR 50,000 crore and approves governance, AIF and adviser fee changes
SEBI approved measures to raise the asset-size threshold for foreign portfolio investor disclosures, adjust Category II alternative investment fund rules, and update governance for market infrastructure institutions. SEBI deferred structural amendments for certain intermediaries and will form a high-level committee to review conflict-of-interest and disclosure requirements. The equity assets under management threshold for full disclosure by FPIs will increase to INR 50,000 crore.