The Supreme Court on Tuesday (April 1, 2025) asked Lok Sabha member Mahua Moitra to make a representation to the Securities and Exchange Board of India (SEBI) seeking public disclosure of norms for foreign portfolio investors (FPIs) and alternative investment funds (AIFs).
A Bench of Justices B.V. Nagarathna and Satish Chandra Sharma disposed of the petition, which sought transparency and investor awareness in financial markets by mandating public disclosure of the ultimate beneficial owners’ details and portfolio holdings of AIFs and FPIs.
Advocate Prashant Bhushan, appearing for Ms. Moitra, urged the court to put the SEBI on a four-week deadline to respond to the proposed representation.
“The rapid expansion of AIFs and FPIs in India’s financial markets has given rise to serious transparency concerns. Unlike mutual funds, which are subject to stringent public disclosure norms, AIFs and FPIs operate under opaque structures, raising risks of market manipulation, money laundering and tax evasion,” the petition said.
Mr. Bhushan said chances were that SEBI would keep the representation without any response indefinitely.
However, the Bench said the petitioner was free to take action according to law if the securities market regulator did not respond within a “reasonable time”. SEBI oversees the operation of AIFs and FPIs.
The petition highlighted the growth of AIFs registered with SEBI by 30-fold from 42 as in March 2013 to over 1,528 as in March 2025. The Assets Under Management (AUM) of AIFs has increased over 835 times from 1,437 crore in March 2013 to nearly 13 lakh crore as in December 2024. The current Assets Under Custody (AUC) of registered FPIs in India was over 74 lakh crore as in January 2025.
Published – April 01, 2025 03:03 pm IST
