FPI Demands: 5-Year Licence, Closing Auction, Disclosure Relief
Why in the news
Foreign investors sought relaxations to cut compliance work and match global practice.
Key facts
- Tenure: renewal now every 3 years; ask is 5.
- CAS: used in the US, Hong Kong, Japan and EU; harder to manipulate and helps passive funds lower tracking error.
- Disclosure: FPIs above 50% in one group or ₹50,000 crore equity AUM must name last natural persons.
| Demand | Now |
|---|---|
| 5-year licence | 3-year renewal with fees |
| Closing Auction Session | Closing price by VWAP |
| Exemption for large private funds | Exempt only: sovereign, retail public, regulated pooled vehicles |
Significance
A longer cycle would lower compliance overhead and signal ease of doing business.
Exam angle
- Closing price method now: VWAP.
- Thresholds: 50% single-group, ₹50,000 crore AUM.