Under the new rules, FPIs will have to inform SEBI and the designated depository in writing within seven working days of misleading or false information relating to any change in their structure or control.
New Delhi:
Capital market regulator Securities and Exchange Board of India (SEBI) has tightened the disclosure rules for Foreign Portfolio Investors (FPIs). Under this, they have been asked to disclose any major change in their structure and joint ownership within seven business days. According to a notification, SEBI may ask for any additional documents from them if required in connection with new FPI registration.
Under the new rules, FPIs will have to inform SEBI and the designated depository in writing within seven working days of misleading or false information relating to any change in their structure or control. Further, the FPI will have to inform within seven days about any penalty, pending proceedings, findings of investigation, for which action may be taken or is being taken by any foreign regulator.
Earlier as per the existing rules, FPIs were required to inform the Designated Depository Participant “immediately”, which has now been replaced with “as soon as possible but not later than seven working days”.
Market experts believe that FPIs used to take a long time in disclosing this information as there was no strict timeline prescribed in the rules. SEBI said that the new rules have come into effect from March 14.