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Last updated: June 29, 2023, 02:09 AM IST
SEBI said offshore funds that have invested more than 50% of their assets under management in a single group of companies and more than 250 billion rupees ($3 billion) in Indian stock markets will have to disclose their investors.
The move aims to expose the mysterious structures through which some offshore funds invest in companies listed in India
India’s markets regulator on Wednesday beefed up disclosure requirements for a group of “high-risk” offshore funds that invest in domestic markets to prevent attempts to sidestep regulations on mandatory public contributions.
The move aims to expose the shadowy structures through which some offshore funds invest in companies listed in India and follows an investigation into suspected abuse by the Adani Group, including Adani Enterprises.
The investigation has left a vacuum so far, while the group has denied any wrongdoing. The regulator’s investigation has so far faltered due to foreign jurisdictions’ strict privacy laws.
“Additional disclosure requirements for foreign investors (offshore funds) have been in the making for a year and a half,” said India Securities and Exchange Board Chairman Madabe Puri Boch.
“We want to make the rules of the game clear from the start regardless of the jurisdictions the money comes from.”
SEBI said offshore funds that have invested more than 50% of their assets under management in a single group of companies and more than 250 billion rupees ($3 billion) in Indian stock markets will have to disclose their investors.
Ananth Narayan J. said:
Those funds would also need to waive the privacy rights granted to them by some jurisdictions.
“This move is expected to further facilitate the greater interest of the stock market to have more diversified shares of publicly listed companies in India,” said Yogesh Chandy, Partner at Shardul Amarchand Mangaldas, Advocates and Solicitors.
“It should also address concerns that there is significant opacity in some public shareholders of listed companies, possibly making it more difficult for promoters to exert additional influence over listed companies through these public shareholders.”
The regulator will exempt additional disclosures by government-owned funds and related investors, sovereign wealth funds, public pension and retail funds, certain exchange-traded funds, corporate entities and verified pooled investment vehicles that meet certain conditions.
It also halved the timetable for listing initial public offerings.
The revised timeline will apply in two phases and will be voluntary for all public cases opening on or after September 1 and mandatory on or after December 1.
(This story was not edited by the News18 staff and was published from a syndicated news agency feed – Reuters)
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