The Indian capital markets regulator has hardened the conditions under which foreign portfolio investors (FPIs) with outsized exposures would be spared from making full disclosure of the investors in the fund.
This was communicated by the Securities & Exchange Board of India (Sebi) to custodians of offshore funds, two persons aware of the regulatory changes told ET. Custodians are banks and non-bank institutions holding cash and securities on behalf of FPIs.
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Resident Indians can only invest in FPIs whose exposure to India is less than 50% while total subscription by non-resident Indians (NRI) cannot exceed 50% of a fund corpus.
A standard operating procedure (SOP) finalised by custodians of FPIs and the Securities and Exchange Board of India (Sebi) over the weekend has laid down the ground rules to stop the misuse of such overseas investment entities, two persons familiar with the subject told ET.