what are the new disclosure norms introduced by sebi in 2024?
The Securities and Exchange Board of India (SEBI) has introduced new guidelines that will be enforced from February 1, 2024. These guidelines include
- Tightened ownership norms,
- enhanced disclosure standards
- Framework for Offer for Sale (OFS) of Shares to Employees through Stock Exchange Mechanism.
The new ownership rules pose a significant challenge for foreign portfolio investors (FPIs), as they are required to comply with granular disclosure standards and may need to rebalance their holdings to meet the enhanced disclosure criteria. Offshore funds have been given seven months to liquidate their holdings if they fail to disclose investor data. However, SEBI does not expect a large number of FPIs to be impacted by the new disclosure norms, as exemptions have been put in place to take into account various scenarios. These changes reflect SEBI's aim to strike a balance between regulatory stringency and facilitating genuine investment, while also enhancing transparency in the Indian financial markets.
The Securities and Exchange Board of India (SEBI) has introduced new guidelines in 2024, including regulations on short selling and ownership norms. The new rules reiterate the ban on naked short selling and day-trading by institutional investors, tighten disclosure rules, and require investors to provide details on short selling. The regulations also necessitate high-risk foreign funds to provide additional disclosures. These guidelines aim to curb market manipulation, enhance price discovery, and strike a balance between regulatory stringency and facilitating genuine investment. The changes are set to have a significant impact on India's financial landscape, and investors and market participants are advised to brace for imminent changes.
Q. how will sebi's new guidelines affect foreign investors in india?
SEBI's new guidelines are
expected to affect foreign investors in India in the following ways:
Enhanced Disclosures for High-Risk FPIs:
SEBI has introduced enhanced disclosure norms
for high-risk Foreign Portfolio Investors (FPIs), which are set to come into
effect from February 1, 2024. These norms aim to increase transparency and risk
management for such investors
Impact on Ownership Norms:
The tightened ownership norms, which will be
enforced from February 1, 2024, pose a significant challenge for foreign
portfolio investors (FPIs). While certain categories of FPIs have received
exemptions, non-compliance is more likely among FPIs holding more than 50% of
their Indian equity assets under management in a single company
Limited Impact on Large Number of FPIs:
SEBI does not expect a large number of foreign
portfolio investors to be impacted by the new beneficial ownership disclosure
norms. Exemptions from enhanced disclosures have been provided to certain
categories of FPIs, such as Sovereign Wealth Funds (SWFs), listed companies on
certain global exchanges, and other regulated pooled investment vehicles with
diversified global holdings
In summary, the new SEBI guidelines are aimed at increasing transparency and reducing risk for foreign investors in India, with specific provisions targeting high-risk FPIs and imposing ownership norms.
Q. what are the new disclosure norms for high-risk FPIs by sebi?
SEBI's new enhanced disclosure norms for high-risk Foreign Portfolio Investors (FPIs) are set to become effective from February 1, 2024. These norms require FPIs to provide granular details on their ownership, economic interest, and control in certain objectively identified high-risk FPIs. The deadline for the identified high-risk FPIs to disclose the required details was initially set for January 31, 2024, with a grace period of another 10 days until February 10, 2024, for compliance. Even after February 10, there is no immediate deadline, as these high-risk FPIs would have another six months to make the needed disclosures. The new norms aim to increase transparency and risk management for high-risk FPIs, with the goal of preventing market manipulation and ensuring regulatory compliance.
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