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Last Natural Person Above Every Person Clause

Santhosh Kumar 17/07/2023

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Last Natural Person Above Every Person Clause upsc notes
Context
SEBI faced challenges
Hindenburg-Adani allegations case
What
Ultimate individual
Control or ownership over
Financial investment like FPI
Transparency and accountability
In the investment structure
Most national and international laws
Lack such provisions
FPI Vs FDI
FPI (Foreign Portfolio Investment)
Investments by foreign individuals or entities
In financial assets
Stocks, bonds, mutual funds
FDI (Foreign Direct Investment)
Investments by foreign individuals or entities
In tangible assets
Businesses, properties, infrastructure projects
Long-term commitment
Significant level of control and ownership
Challenges posed by FPIs
Use of multiple platforms
Below limit for beneficial owner identification
Operation in tax haven jurisdictions
Ambiguity around ownership and control
SEBI's Proposed Disclosure Requirements for FPIs
Tighter Rules for High-Risk FPIs
50% concentration in a single group or
Assets valued above Rs 25,000 crore
Additional details about
Ownership, economic interests, control rights
Transition Period and Adherence
50% exposure to a single corporate group
Six-month transition period
Additional disclosure requirements
Detailed Ownership Information and Enhanced Transparency
Comprehensive ownership information of FPIs
Details about
Natural persons, public retail funds, large public-listed companies
Stricter FPI Disclosure Standards
Stricter globally
Greater transparency and accountability
FPI Categorization
Based on risk levels
Low-risk: Government entities, central banks, sovereign wealth funds
Moderate-risk: Pension funds, public retail funds
High-risk: All other FPIs

Categories: Financial/Security/Capital Market

Tags: 12.07.2023, Newsbits

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