The board of the Securities and Exchange Board of India (SEBI) has on March 24 approved increasing the threshold for granular disclosures by foreign portfolio investors (FPIs) to Rs 50,000 crore from the current Rs 25,000 crore.

These disclosures are related to ensuring compliance with PMLA/PMLR regulations.

"Cash equity market trading volumes have more than doubled between FY 2022-23 (when the limits were set) and the current FY 2024-25. In light of this, the Board approved a proposal to increase the applicable threshold from the present Rs 25,000 crore to Rs 50,000 crore. FPIs holding more than Rs 50,000 crore of equity AUM in the Indian markets will now be required to make additional disclosures as described in the circular dated August 24, 2023," stated the release issued by Sebi.

The disclosure threshold was essentially aimed at preventing potential circumvention of Press Note 3, a 2020 government directive tightening scrutiny on foreign investments from countries sharing a land border with India.

The capital markets regulator has, however, not made any changes to the requirement that additional disclosures need to be made if more than 50 percent of the equity AUM is concentrated in a single corporate group.

Responding to a question on the announcement. Tuhin Kanta Pandey added, "Many of the funds (public, sovereign funds) were exempt from these additional disclosures. There are already disclosures as per PMLA and KYC for every FPI. We were only asking for more granular disclosures," he said.