Agencies
New Delhi:Amid apprehensions that its April 10 circular on beneficial ownership of offshore funds could cause potential capital outflows of $75 billion, the Securities and Exchange Board of India (Sebi) said on Wednesday it would review the matter and take a “holistic view”, seeking to assuage panic among investors.
The markets regulator said a working group, set up under former Reserve Bank of India deputy governor HR Khan to address various issues relating to the circular, has already heard various stakeholders and is in the process of giving its recommendations. “Ministry of finance, government of India has also been consulted on various issues. Based on these inputs, Sebi would review the matter and shortly take a holistic view,” it said in a statement. On Tuesday, Economic Affairs Secretary Subhash Chandra Garg, too, sought to downplay fears of huge capital outflows, saying the directive has no “immediate implications”. He added Sebi had already extended the circular’s deadline to December 31 for providing details on the beneficial owners — or the natural persons who ultimately own or control foreign portfolio investors (FPIs).
Earlier this week, Asset Managers Roundtable of India (AMRI), an investor lobby group, warned that Sebi’s new KYC norms stipulated in the circular could lead to outflows of $75 billion and hit the domestic currency and stocks. However, Sebi has termed “preposterous and highly irresponsible” the claim of $75-billion in potential outflows.
The regulator, in April, had asked Category II and III FPIs to provide list of their beneficial owner in a prescribed format within six months.
(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)
