“There is no immediate deadline or limit for FPIs to liquidate their shares,” sources said. Sebi had earlier asked FPI to reduce this exposure by January 29, 2024.
Foreign portfolio investors (FPIs) will have seven months to liquidate their holdings if they fail to meet the January-end deadline set by the Securities Commission, top sources said. and India Exchange set out to reveal data about their investors.
In August last year, the Securities and Exchange Board of India (Sebi) issued a circular asking high-risk FPIs to hold more than 50% of their assets under management in the form of shares of a single group. company or having aggregate shares in the Indian Stock Exchange worth more than Rs 25,000 crore, disclose detailed details of all entities holding ownership, economic interest or exercising control in REIT.
“There is no immediate deadline or limit for FPIs to liquidate their shares,” sources said. Sebi had earlier asked FPI to reduce this exposure by January 29, 2024.
If the REIT continues to meet the enhanced disclosure criteria by the end of January, it will have an additional 10/30 business days to provide the necessary additional details, it said. “Even then, if they don’t provide any details, they will have another six months to reduce their assets,” the source said.
Sources said REITs that meet enhanced disclosure criteria as of October 31, 2023 have until the end of January 2024 to rebalance their holdings if they wish.
According to stock exchange data, FPI sold shares worth over Rs 27,000 crore between January 17 and 23 in the cash market. According to data from National Securities Depository Ltd (NSDL), FPIs sold a net of Rs 19,308 crore of local stocks as of January. Net inflows from FPIs, after taking into account their investments in IPOs and markets debt, stood at Rs 4,439 crore in January.
The Sebi circular comes into effect from November 1, 2023. As per the standard operating procedure (SOP) issued by the depository of FPIs on additional disclosure norms, FPIs are not currently compliant investment limits as of October 31, 2023 will be subject to this de-risking within 90 calendar days, i.e. January 29, 2024 (the settlement date), unless they fall within one of the following categories: exempt items.
According to sources, FPIs may be asked to provide enhanced disclosures that are expected to be significantly lower than estimates in the consultation paper and SEBI board notes. In May, Sebi had said that based on data as of March 31, 2023, FPI assets under management worth around Rs 2.6 lakh crore could be identified as high-risk FPI and need to be Reveal more.
Sources said enhanced disclosure exemptions have been granted to REITs that are sovereign wealth funds (SWFs), companies listed on several global stock exchanges, mass retail funds They and other pooled investment vehicles are managed with globally diversified holdings.
The markets regulator has imposed additional disclosure norms for high-risk FPIs after observing that some FPIs held a concentrated portion of their equity portfolios in a company/group of companies.
Such concentrated investments raise concerns and the possibility that backers of such companies/groups of companies or other investors acting in concert may use the FPI route to circumvent the requirements legal requirements such as disclosure requirements under the Regulations. Sebi said, 2011. (SAST Regulations) or maintaining minimum public shareholding (MPS) in the listed company.
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