Sources involved with the monitoring said the issue is expected to be discussed at the next meeting of the high-level committee on capital markets (HLCC) comprising financial sector regulators and representatives from the finance ministry.
It will form the basis for a review of the regulatory architecture governing SWFs in addition to addressing basic issues like definition of such funds. A date for the HLCC meeting is yet to be finalised.
SWFs are usually special purpose investment vehicles created to manage national savings to generate higher returns. Countries with large balance of payments surpluses are able to transfer excess foreign exchange reserves to such investment vehicles.
Typically, countries that have set up SWFs have surplus on the current account due to "windfall" or sustained current account surpluses and usually a fiscal surplus, as well.
While a host of SWFs, including the likes of Temasek and Government Investment Corporation of Singapore , have invested in Indian companies, there are no estimates available about the scale of their operations in the country.
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Globally, the funds are at the centre of attention given the nature of the investment. While some countries have put in place rules to regulate these funds, there are no separate guidelines to deal with them in India. An SWF can operate in India after registering as a foreign institutional investor.
RBI has expressed its discomfort over the operations of SWFs in the past, prompting a review of the norms. Even security agencies have raised concerns since a large number of the funds have origins in oil-rich Gulf countries.
However, when the issue came up for discussion at the HLCC meeting, it was discovered that there was no data to gauge the scale of their operations.