Module: | Specialized Audits, Tech & ESG Disclosures
Q81: Consider the following statements regarding the granular disclosure norms for Foreign Portfolio Investors (FPIs) enforced by SEBI in late 2025:
1. FPIs that hold more than 50 percent of their Indian equity Assets Under Management (AUM) in a single Indian corporate group are mandated to disclose their granular ownership details.
2. FPIs that individually hold more than Rupees 25,000 Crore of equity AUM in the Indian markets must fully identify their ultimate beneficial owners.
3. Sovereign Wealth Funds, central banks, and public retail funds are strictly exempted from these enhanced granular disclosure requirements.
Which of the above statements is/are correct?
2. FPIs that individually hold more than Rupees 25,000 Crore of equity AUM in the Indian markets must fully identify their ultimate beneficial owners.
3. Sovereign Wealth Funds, central banks, and public retail funds are strictly exempted from these enhanced granular disclosure requirements.
Which of the above statements is/are correct?
✅ Correct Answer: D
🎯 Quick Answer:
D. All statements 1, 2, and 3 are correct.Structural Breakdown: Statement 1 is correct; the 50% concentration threshold triggers immediate scrutiny to check if promoters are using offshore funds to round-trip money into their own companies.
Statement 2 is correct; massive funds (>Rs 25,000 Crore) pose a systemic risk and must identify their ultimate economic beneficiaries.
Statement 3 is correct; sovereign wealth funds and broad-based public funds are exempt because their risk of being a front for domestic promoter manipulation is statistically negligible.
Historical/Related Context: The tightening of FPI norms was accelerated following the Hindenburg-Adani saga, where allegations surfaced that offshore funds heavily concentrated in one corporate group were actually covertly controlled by the group's own promoters to bypass Minimum Public Shareholding (MPS) rules.
Causal Reasoning: Forcing disclosure when an FPI is heavily concentrated in a single stock group prevents promoters from artificially inflating their own stock prices using disguised offshore money.