SC asks Mahua Moitra to urge SEBI for greater transparency in financial markets

Mahua Moitra to make representation to the Securities and Exchange Board of India for seeking transparency and investor awareness in the financial markets by mandating public disclosure of ultimate beneficial owners (UBO) details as well as portfolio holdings of alternative investment funds (AIFs) and foreign portfolio investors (FPIs).

A Bench led by Justice BV Nagarathna while refusing to entertain the Moitra’s petition gave liberty to her to make representation to Sebi. Once representation is made, it shall be considered in accordance with law, the apex court said

The MP told the SC that the rapid expansion of AIFs and FPIs in India's financial markets has given rise to serious transparency concerns. “Unlike Mutual Funds (MFs), which are subject to stringent public disclosure norms, AIFs and FPIs operate under opaque structures, raising risks of market manipulation, money laundering, and tax evasion,” she said.

The lack of public disclosure norms on AIFs and FPIs pose severe risks to financial stability, market integrity, and economic sovereignty, she said.

Given the increasing role of AIFs and FPIs in India's financial markets, regulatory transparency is crucial to protect the interest of market stakeholders, especially the retail investor, ensuring market stability and preventing financial malpractices through circumvention of the law, the petitioner said.

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According to the petition filed through counsel Prashant Bhushan, the capital markets in India have witnessed an unprecedented growth through AIFs and FPIs in the last few years.

«Furthermore, with increasing foreign investment into the Indian market, the absence of transparent UBO disclosure norms raises concerns over possible money laundering