What are Sebi's UBO norms for FPIs and what needs to be done to save licence?
Citing sources, ET Now reported that only a small number of FPIs will likely be impacted by SEBI's September 9 deadline on UBO norms. The report stated that non-compliant FPIs can continue beyond September 9 by paying a 5% penalty.
FPIs will get an additional six months to comply after paying the penalty, ET Now said, quoting these sources.
Large FPIs with over Rs 25,000 cr in equity assets have either met or are exempted under Sec 43B of FPI norms.
What are UBO norms and how do they affect FPIs?
On August 24, 2023, the Securities and Exchange Board of India (Sebi) issued a circular making it mandatory for certain FPIs to disclose granular details of ultimate beneficial owners (UBOs). As per the circular, two kinds of FPIs are needed to submit UBO information. One, those with more than Rs 25,000 crore of assets under management (AUM) in India. They include multiple funds controlled by the same entity or firm. Second, are FPIs who hold over 50% of their India portfolio in a single corporate group.
However, specific exemptions were given to sovereign wealth funds, foreign mutual funds and others from the Rs 25,000-crore AUM rule.
Anyone not exempted from the rule was required to furnish their UBO information by February 28, 2024, failing which they had 180 days ending September 9 to bring down their AUMs below the Rs 25,000-crore mark, or risk losing their licence to operate in India.
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