Market regulator, the Securities and Exchange Board of India (SEBI) has just made an important move to tighten its grip on foreign investors and boost transparency. SEBI has raised the disclosure bar for Foreign Portfolio Investors (FPIs), doubling the threshold from ₹25,000 crore to ₹50,000 crore. Simply put, only those holding more than ₹50,000 crore in Indian equities will now need to disclose detailed info about who really owns and controls the money.

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What Changed with FPI Rules?

SEBI‘s updated rules zoom in on big-ticket investors. If an FPI holds over ₹50,000 crore in Indian stocks, they’ll now need to lay all their cards on the table—ownership details, economic interest, control structures, the whole deal. The goal is clear: spot and stop high-risk investors, especially those using complicated or shady setups to hide what’s really going on.

“Cash equity markets’ trading volumes have more than doubled between FY 2022-23 and the current FY 2024-25. In light of this, the board approved a proposal to increase the applicable threshold from the present ₹25,000 crore to ₹50,000 crore,” said Tuhin Kanta Pandey, Chairman of SEBI.

“Thus, FPIs holding more than ₹50,000 crore in equity AUM in the Indian markets will now be required to make additional disclosures,” he added.

This isn’t just a one-off change, however, and it’s part of a bigger push to keep India’s markets clean, stable, and trustworthy, especially with foreign money flowing in at a record pace.

Rethinking Conflicts of Interest

SEBI’s not stopping with FPIs. It’s also launching a full review of its conflict-of-interest rules. This includes a deep dive into how intermediaries, credit rating agencies, mutual funds, and other market players operate—especially those playing multiple roles like advising, managing funds, and doing research.

With financial firms getting more complex—and tech like AI and algorithm-based advice entering the mix—it’s getting harder to spot where conflicts might be hiding. SEBI wants to make sure its rules are strong enough to keep up.

Mixed Reactions from the Industry

Unsurprisingly, not everyone’s cheering. Some fund managers say the change is smart—it makes things easier for smaller investors and puts the spotlight where it belongs. Others worry that big investors might try to game the system by splitting their holdings to stay under the new threshold.

“There’s a real chance that people will try to fly under the radar,” warned a senior compliance officer at a global investment firm. “SEBI will need to keep a close eye and make sure its monitoring tools are up to the job.”

Creation of Review Committee

SEBI also plans to create a review committee to oversee and monitor conflicts of interest or discrepancies in disclosures concerning property, investments and liabilities of board members.

“The objective of the high-level committee is to comprehensively review and make recommendations for enhancing the existing framework for managing conflict of interest, disclosures and related matters towards ensuring the high standard of transparency, accountability and ethical conduct of members and officials of the board,” said the SEBI Chairman.

This setup of the committee follows the allegations leveled on former SEBI Chairperson Madhabi Puri Buch involved in the Hindenburg Research/Adani Group issue, where Hindenburg Research alleged that SEBI was unwilling to prosecute Adani members due to alleged offshore funds held by Ms. Buch.

What’s Next?

SEBI plans to release a consultation paper soon. It’ll outline more details on both the FPI rule changes and the conflict-of-interest review. Industry players will get a chance to weigh in before anything becomes final.

The bottom line? SEBI’s stepping up as a proactive regulator—trying to keep the market fair, trustworthy, and ready for more global action. And if this is any sign of what’s to come, investors should buckle up for a more transparent (but closely watched) future.