Foreign Portfolio Investors Lobby Group Opposes More Inspection Powers For Securities & Exchange Board Of India

The Asia Securities Industry and Financial Markets Association (ASIFMA) has opposed the H R Khan Committee recommendation which would give capital market regulator Securities and Exchange Board of India (SEBI) more powers of inspection.

ASIFMA is a lobby group representing foreign portfolio investors (FPIs) like global banks and asset managers such as Blackrock, Amundi, BNY Mellon and the Capital Group.

Earlier, the H R Khan committee had proposed in its report that SEBI should have powers to summon and inspect additional documents of foreign portfolio investors (FPIs) which come from high risk jurisdictions.

As per present norms, FPIs submit only information about their beneficial owners (BO) to the SEBI.

Questioning the need for SEBI to be given more powers, the ASIFMA wrote to the capital market regulator recently that such a proposal is too broadly defined and asked for clarifications about what type of documents would have to be submitted to SEBI as per its proposed powers.

In 2018, SEBI had tried to reintroduce the concept of high risk jurisdictions, but a backlash from FPIs had forced the regulator to withdraw it.

The HR Khan Committee had proposed that special requirements should be applied to funds coming from high-risk jurisdictions and additional compliance requirements on funds coming from such countries.

However, it is understood that SEBI is unwilling to come up with any standard list of high risk jurisdictions because this could impact India’s diplomatic relations with these countries.