The Securities and Exchange Board of India (SEBI) has introduced certain amendments to and circulars in relation to the SEBI (Foreign Portfolio Investors) Regulations, 2019 which require certain Foreign Portfolio Investors (FPIs) to provide additional disclosures regarding their ultimate ownership, economic interest and control.


Pursuant to these amendments, with effect from November 1, 2023, all FPIs holding:

  • more than 50% of their Indian equity assets under management (AUM) in a single Indian corporate group; or
  • individually or along with their investor group, more than INR 250,000,000,000 (Indian Rupees Two Hundred Fifty Billion) of equity AUM in the Indian markets,

were required to provide details of all entities holding any ownership, economic interest, or exercising control in the FPI on a full look through basis and up to the level of all natural persons, without any threshold.


SEBI has recognized that FPIs which have a broad based, pooled structure with a widespread investor base, ownership interest by Government or Government related investors, etc. may not pose a significant systemic risk. Such FPIs have therefore been exempted from making the aforesaid additional disclosures.


These changes have been introduced by SEBI to mitigate the concerns regarding the potential circumvention of the requirements of the Press Note 3 of 2020 and the minimum public shareholding threshold (i.e., 25% of the paid-up share capital) to be maintained by listed entities. The additional disclosures regarding the beneficial ownership and control of the FPIs, up to the level of the ultimate natural persons and without any percentage threshold, would assist regulatory authorities in identifying whether the ultimate controlling person or beneficial owner of the FPI (and in turn, the listed entity) is located in or a resident of a country sharing a land border with India or associated with the promoter or promoter group of the listed entity. However, this could pose significant regulatory challenges for any FPIs present or looking to enter the Indian securities market.