The Securities and Exchange Board of India (SEBI) has established a 6 members high-level committee to review and enhance its conflict-of-interest and disclosure norms for board members and officials. This initiative, approved during SEBI’s first board meeting under new Chairman, which aims to bolster transparency, accountability, and ethical conduct within the regulatory body.
The move follows allegations against former SEBI former Chief, who was accused by Hindenburg Research of potential conflicts of interest related to a particular company investigation. Although all these allegations were denied by the former SEBI chief and the company. In response, Chairman emphasized the need for SEBI to transparently disclose conflicts of interest to maintain public trust.
The committee is chaired notable civil servant, former Secretary of the Ministry of Corporate Affairs, serving as vice-chairman. Other notable members include, founder of a Bank, and former executive director of the Reserve Bank of India. The panel is tasked with reviewing and recommending enhancements to SEBI’s existing conflict-of-interest framework, including disclosure norms related to property, investments, and liabilities of board members and officials. The committee is expected to submit its recommendations within three months. These recommendations will aim to update the 17-year-old regulations and increase disclosures from SEBI members, thereby strengthening the regulator’s framework for ethical conduct and transparency.
This initiative is part of SEBI’s broader efforts to enhance trust and transparency in its operations, especially in light of recent controversies. By proactively addressing potential conflicts of interest, SEBI aims to reinforce its commitment to ethical governance and maintain investor confidence in India’s financial markets.
SEBI Issues Clarifications on Rules Governing Specialized Investment Funds
The Securities and Exchange Board of India (SEBI) has issued clarifications to its regulatory framework for Specialized Investment Funds (SIFs), which are set to take effect from April 2025. These clarifications aim to provide further guidance on investment thresholds and operational norms for fund managers and investors.
1. Minimum Investment Requirement:
- SEBI specified that the minimum investment of ₹10 lakh in SIFs is to be maintained at the Permanent Account Number (PAN) level for each investor.
- This requirement does not apply to mandatory investments made by asset management companies (AMCs) for their designated employees.
2. Interval Investment Strategies:
- SEBI stated that existing rules concerning the maturity of securities in interval schemes will not be applicable to interval investment strategies under SIFs.
These clarifications are effective immediately and aim to ensure a uniform understanding and implementation of the SIF framework introduced in February 2025. The SIF framework was established to bridge the gap between mutual funds and Portfolio Management Services (PMS), offering greater portfolio flexibility to investors. Investors and AMCs are advised to adhere to these clarifications to ensure compliance with SEBI’s regulatory expectations.
SEBI Relaxes Disclosure Rules for FPIs, Raises Asset Threshold to ₹50,000 Crore
The Securities and Exchange Board of India (SEBI) has revised its disclosure norms for Foreign Portfolio Investors (FPIs) by doubling the asset threshold for mandatory granular disclosures from ₹25,000 crore to ₹50,000 crore. This change aims to align regulatory requirements with the growing scale of India’s capital markets.
- Increased Threshold: FPIs or investor groups with equity Assets Under Management (AUM) exceeding ₹50,000 crore in Indian markets are now required to disclose detailed information about all entities holding any ownership, economic interest, or control, on a full look-through basis.
- Immediate Implementation: The updated framework is effective immediately, following SEBI’s board approval in March 2025.
- Exemptions: Certain FPIs, such as those with broad-based, pooled structures and widespread investor bases, or those with government or government-related ownership interests, are exempted from these additional disclosure requirements, subject to specific conditions.
In August 2023, SEBI mandated FPIs with over 50% of their equity AUM in a single corporate group or with overall holdings exceeding ₹25,000 crore in Indian equity markets to provide detailed disclosures of all entities holding any ownership, economic interest, or exercising control in the FPI. The recent adjustment reflects SEBI’s response to the significant increase in trading volumes and liquidity in the Indian capital markets, aiming to enhance transparency and prevent potential market disruptions.
This newsletter is compiled and contributed by Sanskar Girothia was led by India Juris, New Delhi team.
Disclaimer: The information published in the above newsletter is collected from various sources in electronic medium and analyzed by the firm. The reader is advised to consult the attorney qualified in their jurisdiction, before acting on any information contained in this newsletter. India Juris excepts no liability what so ever in this regard.
