Why Sebi's new KYC norm may lead to the exit of many legitimate investors

While the intent may be laudable, there are several problems with the approach

A SEBI circular will cause a lot of market turmoil unless it is reviewed and reworded. On April 10, SEBI modified the KYC norms applicable to Foreign Portfolio Investors. NRIs, OIC s and PIOs are now prevented from being "Beneficial Owners", or "in control", via the FPI route.

This was done with the intent of preventing money-laundering and round-tripping, maybe with an eye to reduce hawala funding before the General Elections of 2019.  Hence, FPIs are being told to disclose Beneficial Owners (BO). The threshold is set at 25 per cent for controlling ownership for companies, and 15 per cent