On March 24, 2024, the Securities and Exchange Board of India (SEBI) made a significant announcement by approving a proposal that will double the investment disclosure threshold for foreign portfolio investors (FPIs) to an impressive ₹50,000 crore. This move is expected to reshape the dynamics of the Indian securities market, as trading volumes in cash equity markets have seen a remarkable increase, more than doubling from FY 2022-23 to the current fiscal year.
Increased Disclosure Requirements for FPIs
According to Tuhin Kanta Pandey, the Chairman of SEBI, the decision to elevate the threshold from ₹25,000 crore to ₹50,000 crore aligns with the substantial growth in market activity. This adjustment means that any FPIs managing assets exceeding ₹50,000 crore will now be obligated to provide detailed information about their investors and stakeholders.
- New threshold: ₹50,000 crore (previously ₹25,000 crore)
- Growth in trading volumes: More than doubled since FY 2022-23
This change aims to enhance transparency without modifying the existing concentration criteria within the market, ensuring that the regulatory framework remains robust.
Formation of a High-Level Review Committee
In a related development, SEBI has decided to establish a high-level committee tasked with reviewing potential conflicts of interest and disclosure practices among its board members and officials. This committee is expected to include experts from various sectors, including government, academia, and private industries.
- Committee Objective: To enhance transparency and accountability standards
- Timeline: Recommendations to be submitted within three months
While the names of the committee members have yet to be revealed, Chairman Pandey assured the media that details would be disclosed in due time. This initiative follows recent controversies surrounding former SEBI Chairperson Madhabi Puri Buch, who faced scrutiny over her involvement in the Hindenburg Research allegations concerning the Adani Group.
Addressing Concerns and Ensuring Accountability
The formation of this committee is a proactive step to ensure that SEBI maintains high ethical standards in its operations. According to Pandey, the committee will focus on bolstering the framework for managing conflicts of interest and ensuring proper disclosures, thereby reinforcing the integrity of the board.
This latest regulatory development reflects SEBI’s commitment to adapt to evolving market conditions while holding its members to the highest standards of accountability and transparency in their dealings. As the landscape of foreign investments continues to evolve, these changes are crucial for fostering investor confidence in the Indian market.
For more insights on investment regulations and market dynamics, visit SEBI’s official site for the latest updates.
