SEBI Board Decisions: Conflict of Interest Panel, FPI Limit
Why in the news
SEBI’s board meeting approved several governance and ease-of-business changes, including a committee to rework conflict-of-interest rules for the regulator.
Key decisions
- High-Level Committee (HLC): experts from regulators, government, private sector and academia; to report within three months, after which SEBI’s board will consider it.
- The framework, last revised in 2008, will be revisited for better disclosures and self-recusal. Chairman Tuhin Kanta Pandey stressed a clear framework to build trust and handle complaints openly.
- FPI threshold: granular ownership disclosure limit doubled to ₹50,000 crore; the 50% AUC concentration limit for a single group is unchanged.
- Category II AIFs: investments in listed debt rated ‘A’ or lower will be treated as unlisted.
| Area | Before | After |
|---|---|---|
| FPI granular disclosure threshold | ₹25,000 crore | ₹50,000 crore |
| IA advance fee | Two quarters | Up to one year |
| RA advance fee | One quarter | Up to one year |
| PID cooling-off between MIIs | Applied | Removed |
Governance changes at MIIs
- If a Public Interest Director is not reappointed after one term, the reason must be recorded and shared with SEBI.
- Compliance officer, chief risk officer and chief technology officer are now approved by the MII governing board, not the NRC.
Other updates
- Amendments for merchant bankers, debenture trustees and custodians were deferred.
- F&O reforms on risk monitoring and open interest drew mostly positive feedback; some concerns remain under review.
Exam angle
- SEBI Chairman: Tuhin Kanta Pandey.
- Expansions: HLC, PID, MII, AIF, FPI.
- Committee timeline: three months.