The Aryavarth Express
Agency (New Delhi): The Securities and Exchange Board of India (SEBI) has introduced modifications to the disclosure norms for offshore funds, offering exemptions from disclosing investor details under certain scenarios. This move partially relaxes the stringent disclosure regulations implemented last year.
According to a recent SEBI circular, offshore funds that allocate more than 50% of their assets within a single group of companies are exempted from disclosing their investors’ identities, provided that the leading company in the group lacks a significant shareholder or promoter. The term ‘promoter’ is commonly used in Indian markets to describe key shareholders with the potential to impact company decisions.
This exemption comes as a refinement to SEBI’s previous directive, which required offshore funds holding a majority of their assets in a specific group of companies and with investments exceeding 250 billion rupees ($3 billion) in the Indian equity markets, to reveal their investor base.
SEBI has tasked stock exchanges with the responsibility of identifying companies that do not have a major shareholder or promoter, facilitating the implementation of this exemption. Nonetheless, the regulator has stipulated that offshore funds must still comply with the obligation to disclose their holdings if they possess more than 3% of a company’s shares, with such disclosures being mandated within a 10-day timeframe.
This regulatory adjustment by SEBI aims to streamline the investment process for offshore funds while maintaining transparency and oversight in cases where significant stakes are involved.