India's market regulator is canvassing opinion on plans to strengthen disclosure requirements for high-risk offshore funds to avoid violation of public float norms, it said on Wednesday.
The move follows regulators' investigation of suspected violations by offshore funds in companies of the group led by billionaire Gautam Adani, which has drawn a blank so far. The Adani Group has denied wrongdoing.
In a consultation paper that set a June 20 deadline to receive market comments, the Securities and Exchange Board of India (SEBI) said high-risk funds would need to identify all holders with economic and controlling rights.
All funds except for those owned by the government, sovereign wealth funds, pension funds and public retail funds would be considered as high-risk offshore funds, it added.
Its proposal calls for additional disclosures by any high-risk offshore fund holding more than half its equity Asset Under Management (‘AUM’) in a single corporate group, with the funds also required to identify the ultimate owners.
Such funds would need to report changes within seven days to the custodian banks through which funds flow into India.
The disclosure requirements would also cover funds with more than 250 billion rupees ($3 billion) invested in Indian equity markets.
