FPI flows likely to trip on Sebi's stricter ownership disclosure rules

Such investors could reduce their exposure to evade 'high-risk' tag and shift to friendlier jurisdictions, say experts

The Securities and Exchange Board of India’s (Sebi’s) latest proposal on identifying ultimate beneficial ownership of offshore funds could impact portfolio flows and force foreign portfolio investors (FPIs) to redraw their India strategy, experts say.

The markets regulator on Wednesday proposed to categorise FPIs with a composite exposure of more than Rs 25,000 crore and a single-group exposure of more than 50 per cent of their assets as ‘high risk’. Such FPIs will be required to provide additional granular disclosures such as full identification of their ownership, economic interests, and control rights down to the level of natural persons or public