As per SEBI directives, new FPIs seeking registration to trade on Indian stock exchanges were required to provide the information by June 1, while existing investors have till July-end to update their BO details. (SEBI headquarters | Representative image)
Foreign funds and individuals who are foreign portfolio investors in India are “unwilling to disclose” personal information with Indian depositories and the Securities and Exchange Board of India (SEBI) due to concerns around “data confidentiality”, sources told The Economic Times.
SEBI was informed of this by the multinational banks which are acting custodians for these FPIs and has thus called for a meeting to discuss these concerns, sources said.
Moneycontrol could not independently verify the report.
The personal information includes name, address, e-mail ID, income range, permanent account number (PAN) and valid mobile number; in addition to previous requirement of name, address, date of birth, nationality, beneficial ownership percentage, tax residency jurisdiction and tax residency number.
The banks in question include Citigroup, BNP Paribas, Deutsche Bank, JP Morgan and Standard Chartered, as per the report.
One official from a market intermediary said: “fields for mobile number are always left blank by institutional clients, but their daily and monthly trade details are reported via SWIFT messages … This has been conveyed to SEBI by some of the custodians.”
Richie Sancheti, Partner, Algo Legal told the paper that many FPIs have “strict protocols on data confidentiality” and thus sharing information of their beneficial owners (BO) is “commonly not permitted under their operating documents”.
As per SEBI directives, new FPIs seeking registration to trade on Indian stock exchanges were required to provide the information by June 1, while existing investors have till July-end to update their BO details.
The new rules are aimed at curbing money laundering, round-tripping and violations of foreign holding limits in listed Indian companies.
BOs are the largest contributors, usually holding 25 percent share or more in the fund, or those in control and management of an FPI entity which is structured as a corporate. Under regulatory requirements, however, investors with 15 percent and more share, and those with no share but controlling interest in the funds are also considered BOs.